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General Public Licensing And The Intensity Of Aggregate Software Development


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  • Maggie X. Chen
  • Murat Iyigun
  • Keith E. Maskus


We develop a theoretical model in which the sophistication of technologies improves over time due to research and development (R&D) undertaken by software developers in two sectors. In the commercial sector, R&D intensity is driven by economic incentives, whereas in the sector using the General Public License (GPL), it is driven by the preference-based labor supply of individuals. A higher amount of GPL labor allocation generates equilibrium effects that adversely affect commercial software development. When the degree of imitation in the GPL sector is relatively higher than in the commercial sector, or the commercial sector has increasing returns of a limited degree, the R&D intensity in the commercial sector would decline by more than any increases in R&D intensity in the GPL sector. Thus, aggregate R&D intensity in the long run would be reduced. Numerical simulation indicates that this outcome pertains under realistic parameter ranges.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 16 (2007)
Issue (Month): 6 ()
Pages: 451-466

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Handle: RePEc:taf:ecinnt:v:16:y:2007:i:6:p:451-466

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Keywords: General Public Licensing; Proprietary software; Innovation intensity;


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Cited by:
  1. Andreas Freytag & Sebastian von Engelhardt, 2010. "Institutions, Culture, and Open Source," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2010-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.


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