On substitution of intellectual property and free disclosure: an analysis of R&D strategies in software technologies
Major firms have joined the open-source movement and have chosen to apply that development methodology in their projects. Our model examines the links between openness and innovation in software technologies by revealing how disclosure affects the technical quality of computer applications and the profits of myopic and far-sighted firms. The model analyzes the degree of disclosure that should be implemented to optimize profits in various market scenarios. Further, we reveal how social welfare of users (in terms of technical quality of the products that they implement) relates to profit-maximization decisions of the firm. If revenue is unresponsive to openness or slowly responds to it, the firm would prefer to leave the source code proprietary. Otherwise, if the market conditions change and the effective revenue increases rapidly enough with openness, the optimal strategy changes from entirely proprietary to some open-source development.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 13 (2004)
Issue (Month): 5 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/GEIN20 |
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GEIN20|
References listed on IDEAS
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.:
- Lerner, Josh & Tirole, Jean, 2002. "Some Simple Economics of Open," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 197-234, June.
- SHY, Oz & THISSE, Jacques-François, .
"A strategic approach to software protection,"
CORE Discussion Papers RP
-1413, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- 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.
When requesting a correction, please mention this item's handle: RePEc:taf:ecinnt:v:13:y:2004:i:5:p:477-487. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.