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The Jukebox Mode of Innovation - a Model of Commercial Open Source Development


  • Joachim Henkel


In this paper, I describe and analyze the phenomenon of informal development collaboration between firms in the field of embedded Linux, a type of open source software. To explain the observed phenomenon of voluntary revealing, I develop a duopoly model of quality competition. The central assumptions are that firms require two complementary technologies as inputs, and differ with respect to the relative importance they attach to these technologies. The main results are, first, that a regime with compulsory revealing can lead not only to higher profits, but also to higher product qualities than a proprietary regime. Second, when the decision to reveal is endogenized equilibria arise with voluntary revealing by both players.

Suggested Citation

  • Joachim Henkel, 2006. "The Jukebox Mode of Innovation - a Model of Commercial Open Source Development," DRUID Working Papers 06-25, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:06-25

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    References listed on IDEAS

    1. Sterlacchini Alessandro, 2004. "Ricerca e alta tecnologia in Italia: le basi per un rilancio," L'industria, Società editrice il Mulino, issue 4, pages 675-706.
    2. Dooley, J J, 1998. "Unintended consequences: energy R&D in a deregulated energy market," Energy Policy, Elsevier, vol. 26(7), pages 547-555, June.
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    Cited by:

    1. 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.
    2. Massimo D'Antoni & Maria Alessandra Rossi, 2014. "Appropriability and Incentives with Complementary Innovations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 103-124, March.
    3. Stephen M. Maurer & Suzanne Scotchmer, 2006. "Open Source Software: The New Intellectual Property Paradigm," NBER Working Papers 12148, National Bureau of Economic Research, Inc.
    4. Nicolas Jullien & Jean-Benoît Zimmermann, 2011. "FLOSS in an industrial economics perspective," Revue d'économie industrielle, De Boeck Université, vol. 0(4), pages 39-64.
    5. Robert M. Sauer, 2007. "Why develop open-source software? The role of non-pecuniary benefits, monetary rewards, and open-source licence type," Oxford Review of Economic Policy, Oxford University Press, vol. 23(4), pages 605-619, Winter.
    6. Rockett, Katharine, 2010. "Property Rights and Invention," Handbook of the Economics of Innovation, Elsevier.
    7. Ramon Casadesus-Masanell & Gastón Llanes, 2011. "Mixed Source," Management Science, INFORMS, vol. 57(7), pages 1212-1230, July.
    8. Sebastian von Engelhardt, 2010. "Quality Competition or Quality Cooperation? License-Type and the Strategic Nature of Open Source vs. Closed Source Business Models," Jena Economic Research Papers 2010-034, Friedrich-Schiller-University Jena.
    9. Nicolas Jullien & Jean-Benoît Zimmermann, 2011. "Floss firms, users and communities: a viable match?," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 31-53.
    10. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    11. Henkel, Joachim, 2006. "Selective revealing in open innovation processes: The case of embedded Linux," Research Policy, Elsevier, vol. 35(7), pages 953-969, September.
    12. Reisinger, Markus & Ressner, Ludwig & Schmidtke, Richard & Thomes, Tim Paul, 2014. "Crowding-in of complementary contributions to public goods: Firm investment into open source software," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 78-94.

    More about this item


    Innovation; development collaboration; open source software; embedded Linyx;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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