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Dynamic Mixed Duopoly. A Model Motivated by Linux versus Windows

Author

Listed:
  • Casadesus-Masanell Ramón

    (HARVARD BUSINESS SCHOOL)

  • Ghemawat Pankaj

    (HARVARD BUSINESS SCHOOL)

Abstract

This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open-source operating system, and Microsoft s Windows, and consequently emphasizes demand-side learning effects that generate dynamic scale economies (or network externalities). Analytical characterizations of the equilibrium under such conditions are offered, and some comparative static and welfare effects are examined.

Suggested Citation

  • Casadesus-Masanell Ramón & Ghemawat Pankaj, 2006. "Dynamic Mixed Duopoly. A Model Motivated by Linux versus Windows," Working Papers 201048, Fundacion BBVA / BBVA Foundation.
    • Handle: RePEc:fbb:wpaper:201048
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    Cited by:

    1. Xinyu Hua & Kathryn E. Spier, 2023. "Settling Lawsuits With Pirates," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(2), pages 543-575, May.
    2. Luigi Di Gaetano, 2015. "A Model of corporate donations to open source under hardware–software complementarity," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(1), pages 163-190.
    3. Casadesus-Masanell, Ramon & Ricart, Joan E., 2007. "Competing through business models," IESE Research Papers D/713, IESE Business School.
    4. Ramon Casadesus-Masanell & Feng Zhu, 2009. "Strategies to Fight Ad-sponsored Rivals," Working Papers 09-09, NET Institute, revised Sep 2009.
    5. Casadesus-Massanell, Ramon & Ricart, Joan E., 2009. "Company strategy: Business model reconfiguration for innovation and internationalization," IESE Research Papers D/807, IESE Business School.

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