On platforms, incomplete contracts, and open source software

Andras Niedermayer

International Journal of Industrial Organization, 2013, vol. 31, issue 6, 714-722

Abstract: We analyze investment incentives for a firm A owning a software platform and an application and a firm B deciding whether to develop a new application for the platform. While B's entry helps the success of the platform, B fears ex post expropriation by A and is hence reluctant to enter and invest. We show that different platform governance structures prevalent in the Information and Communication Technology industry (integrated, proprietary, standardized, open source platform) serve to balance investment incentives for the platform and for the applications.

Keywords: Platforms; Open source; Standardization; Incomplete contracts; Property rights; Information Technology (search for similar items in EconPapers)
JEL-codes: C70 D23 L13 L22 L86 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:31:y:2013:i:6:p:714-722

DOI: 10.1016/j.ijindorg.2013.07.003

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