Private Provision of a Complementary Public Good
For several years, an increasing number of ¯rms are investing in Open Source Software (OSS). While improvements in such a non- excludable public good cannot be appropriated, companies can bene¯t 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 a®ects the ¯rms' production and pro¯ts. Surprisingly, we ¯nd that there exist cases where incumbents bene¯t from market entry. Moreover, we show the counter-intuitive result that public spending does not necessarily lead to a decreasing voluntary private contribution.
References listed on IDEAS
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- 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.
- Jürgen Bitzer & Philipp J. H. Schröder, 2002. "Bug-Fixing and Code-Writing: The Private Provision of Open Source Software," Discussion Papers of DIW Berlin 296, DIW Berlin, German Institute for Economic Research.
- James W. Friedman, 1983. "Advertising and Oligopolistic Equilibrium," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 464-473, Autumn.
- Andrea Shepard, 1987. "Licensing to Enhance Demand for New Technologies," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 360-368, Autumn.
- Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
- Nicholas Economides, 1997. "Network Externalities, Complementarities, and Invitations to Enter," Industrial Organization 9701004, EconWPA.
- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February. Full references (including those not matched with items on IDEAS)
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