Private Provision of a Complementary Public Good
AbstractFor several years, an increasing number of ¯rms are investing in Open Source Software (OSS). While improvements in such a non- excludable public good cannot be appropriated, companies can bene¯t indirectly in a complementary proprietary segment. We study this incentive for investment in OSS. In particular we ask how (1) market entry and (2) public investments in the public good a®ects the ¯rms' production and pro¯ts. Surprisingly, we ¯nd that there exist cases where incumbents bene¯t from market entry. Moreover, we show the counter-intuitive result that public spending does not necessarily lead to a decreasing voluntary private contribution.
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Bibliographic InfoPaper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 004.
Length: 39 pages
Date of creation: Jun 2006
Date of revision:
Open Source Software; Private Provision of Public Goods; Cournot- Nash Equilibrium; Complements; Market Entry;
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