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Dynamics of Open Source Movements

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Author Info

  • Susan Athey
  • Glenn Ellison

Abstract

This paper considers a dynamic model of the evolution of open source software projects, focusing on the evolution of quality, contributing programmers, and users who contribute customer support to other users. Programmers who have used open source software are motivated by reciprocal altruism to publish their own improvements. The evolution of the open-source project depends on the form of the altruistic benefits: in a base case the project grows to a steady-state size from any initial condition; whereas adding a need for customer support makes zero-quality a locally absorbing state. We also analyze competition by commercial firms with OSS projects. Optimal pricing policies again vary: in some cases the commercial firm will set low prices when the open-source project is small; in other cases it mostly waits until the open-source project has matured.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-10/cesifo1_wp3215.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3215.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3215

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References

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  1. Eliaz, Kfir & Spiegler, Ran, 2006. "Consideration Sets and Competitive Marketing," MPRA Paper 21434, University Library of Munich, Germany, revised 03 Sep 2009.
  2. Ran Spiegler, 2006. "The Market for Quacks," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 1113-1131.
  3. Ran Spiegler, 2005. "Competition over Agents with Boundedly Rational Expectations," Levine's Bibliography 122247000000000535, UCLA Department of Economics.
  4. Xavier Gabaix & David Laibson, 2005. "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets," NBER Working Papers 11755, National Bureau of Economic Research, Inc.
  5. Josh Lerner & Parag A. Pathak & Jean Tirole, 2006. "The Dynamics of Open-Source Contributors," American Economic Review, American Economic Association, vol. 96(2), pages 114-118, May.
  6. Botond Kőszegi & Paul Heidhues, 2008. "Competition and Price Variation When Consumers Are Loss Averse," American Economic Review, American Economic Association, vol. 98(4), pages 1245-68, September.
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Cited by:
  1. Bruno S. Frey & Roger Lüthi & Margit Osterloh, 2011. "Community Enterprises - An Institutional Innovation," CESifo Working Paper Series 3428, CESifo Group Munich.
  2. 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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