Open Source Software, Competition and Potential Entry
We analyze a model with two software firms, quality improving coding expenditures and potential competition. The firms can publish parts of their software as open source. Publishing software implies positive spillovers and thus reduces the firms' coding costs. On the other hand there exist two negative effects. First, lower coding costs induce higher coding expenditures which decreases the firms' profits if their programs are substitutes. Second, open source encourages entry and increases the expenditures required to deter entry. The firms' optimal open source decisions balance these opposite effects.
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- Josh Lerner & Jean Tirole, 2002.
"The Scope of Open Source Licensing,"
NBER Working Papers
9363, National Bureau of Economic Research, Inc.
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- Saint-Paul, Gilles, 2003. "Information Sharing and Cumulative Innovation in Business Networks," CEPR Discussion Papers 4116, C.E.P.R. Discussion Papers.
- Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 995-1012, October.
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