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The Impact of Entry and Competition by Open Source Software on Innovation Activity

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Author Info

  • Jürgen Bitzer

    (Free University Berlin)

  • Philipp J.H. Schröder

    (Aarhus School of Business)

Abstract

This paper presents the stylized facts of open source software innovation and provides empirical evidence on the impact of increased competition by OSS on the innovative activity in the software industry. Furthermore, we introduce a simple formal model that captures the innovation impact of OSS entry by examining a change in market structure from monopoly to duopoly under the assumption that software producers compete in technology rather than price or quantities. The paper identifies a pro-innovative effect of OSS competition.

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File URL: http://128.118.178.162/eps/io/papers/0512/0512001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 0512001.

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Length: 38 pages
Date of creation: 02 Dec 2005
Date of revision:
Handle: RePEc:wpa:wuwpio:0512001

Note: Type of Document - pdf; pages: 38
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Web page: http://128.118.178.162

Related research

Keywords: open source software; innovation; strategic interaction;

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References

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  1. Franke, Nikolaus & Hippel, Eric von, 2003. "Satisfying heterogeneous user needs via innovation toolkits: the case of Apache security software," Research Policy, Elsevier, vol. 32(7), pages 1199-1215, July.
  2. Lerner, Josh & Tirole, Jean, 2002. "Some Simple Economics of Open," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 197-234, June.
  3. Bresnahan, Timothy F & Greenstein, Shane, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 1-40, March.
  4. Bitzer, Jurgen, 2004. "Commercial versus open source software: the role of product heterogeneity in competition," Economic Systems, Elsevier, vol. 28(4), pages 369-381, December.
  5. Bitzer, Jurgen & Schrettl, Wolfram & Schroder, Philipp J.H., 2007. "Intrinsic motivation in open source software development," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 160-169, March.
  6. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
  7. Mustonen, Mikko, 2003. "Copyleft--the economics of Linux and other open source software," Information Economics and Policy, Elsevier, vol. 15(1), pages 99-121, March.
  8. Hertel, Guido & Niedner, Sven & Herrmann, Stefanie, 2003. "Motivation of software developers in Open Source projects: an Internet-based survey of contributors to the Linux kernel," Research Policy, Elsevier, vol. 32(7), pages 1159-1177, July.
  9. Franke, Nikolaus & Shah, Sonali, 2003. "How communities support innovative activities: an exploration of assistance and sharing among end-users," Research Policy, Elsevier, vol. 32(1), pages 157-178, January.
  10. Bitzer, Jurgen & Schroder, Philipp J.H., 2005. "Bug-fixing and code-writing: The private provision of open source software," Information Economics and Policy, Elsevier, vol. 17(3), pages 389-406, July.
  11. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, vol. 24(3), pages 419-440, May.
  12. repec:cup:cbooks:9780521829663 is not listed on IDEAS
  13. O'Mahoney, Siobhán & Ferraro, Fabrizio, 2004. "Managing the boundary of an 'open' project," IESE Research Papers D/537, IESE Business School.
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Citations

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Cited by:
  1. Gaudeul, Alexia, 2008. "Consumer welfare and market structure in a model of competition between open source and proprietary software," MPRA Paper 19555, University Library of Munich, Germany.
  2. Alexia Gaudeul, 2008. "Open Source Licensing in Mixed Markets, or Why Open Source Software Does Not Succeed," Working Papers 08-2, Centre for Competition Policy, University of East Anglia.
  3. Bitzer, Jürgen & Schrettl, Wolfram & Schröder, Philipp J.H., 2006. "Intrinsic Motivation versus Signaling in Open Source Software Development," Working Papers 06-7, University of Aarhus, Aarhus School of Business, Department of Economics.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Portal:Freie Software/Literatur in Wikipedia (German)
  2. Open source in Wikipedia (English)

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