Private Provision of a Complementary Public Good
AbstractFor several years, an increasing number of firms have been investing in Open Source Software (OSS). While improvements in such a non-excludable public good cannot be appropriated, companies can benefit 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 affect the firms' production and profits. Surprisingly, we find that there exist cases where incumbents benefit 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 CESifo Group Munich in its series CESifo Working Paper Series with number 1756.
Date of creation: 2006
Date of revision:
Open Source Software; private provision of public goods; Cournot-Nash equilibrium; complements; market entry;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-05 (All new papers)
- NEP-IND-2006-08-05 (Industrial Organization)
- NEP-MIC-2006-08-05 (Microeconomics)
- NEP-PBE-2006-08-05 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Llanes, Gastón & de Elejalde, Ramiro, 2013.
"Industry equilibrium with open-source and proprietary firms,"
International Journal of Industrial Organization,
Elsevier, vol. 31(1), pages 36-49.
- Gastón Llanes & Ramiro de Elejalde, 2009. "Industry Equilibrium with Open Source and Proprietary Firms," Harvard Business School Working Papers 09-149, Harvard Business School.
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