 Technology, property rights and organizational diversity in the software industryStructural Change and Economic Dynamics, 2012, vol. 23, issue 2, 137-150 Abstract: Why do open- and closed-source productions co-exist? To address this question, the paper studies the viability of distinct systems for software development. The model shows that: (a) for low design costs of modularity, both open- and closed-source productions are viable systems; (b) closed-source production is more likely to be adopted the greater the expected rents on software; and (c) production efficiency is not a necessary condition for the stochastic stability of a system to obtain. These three results can shed light on the emergence of organizational diversity in the software industry. The paper adds to the literature in three ways: first, it considers property rights and technology as endogenous variables in the process of system design; second it argues that in producing software multiple equilibrium designs may exist; and third, it shows that, in because of high rents and low design costs of modularity, production inefficiency can be persistent. Keywords: Software production; System design; Institutional diversity; Transaction costs; Evolutionary games (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:23:y:2012:i:2:p:137-150 DOI: 10.1016/j.strueco.2012.01.003 Access Statistics for this article Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen More articles in Structural Change and Economic Dynamics from Elsevier |
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