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Economics of Open Source Technology: A Dynamic Approach

Author

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  • Jeongmeen Suh

    (Soongsil University)

  • Murat Yılmaz

    (Boğaziçi University)

Abstract

We analyze open source licensing and its effects on firms’ decisions whether to use the open source technology or not and on the incentives for innovation, through a dynamic model of innovation and competition in an environment with a ladder-type technology. We model the basic features of the General Public License (GPL), one of the most popular open source licenses and study how firms behave under this license when competition is present. Under the GPL, any innovative findings using open source technology must also be open source in the subsequent periods, and this obligation creates a trade-off. We focus on how this trade-off affects incentives to use and build up the open source technology.

Suggested Citation

  • Jeongmeen Suh & Murat Yılmaz, 2019. "Economics of Open Source Technology: A Dynamic Approach," Dynamic Games and Applications, Springer, vol. 9(1), pages 254-280, March.
    • Handle: RePEc:spr:dyngam:v:9:y:2019:i:1:d:10.1007_s13235-018-0247-9
    DOI: 10.1007/s13235-018-0247-9
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    References listed on IDEAS

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    Cited by:

    1. Murat Yılmaz, 2022. "Coexistence of proprietary and open‐source firms under product differentiation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4153-4166, December.

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