Open Source Software, Competition and Potential Entry

Thorsten Wichmann and Pio Baake

Berlecon Research Papers from Berlecon Research

Abstract: 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.

Keywords: Open Source; Spillovers; Potential Entry (search for similar items in EconPapers)
Date: 2003-05
New Economics Papers: this item is included in nep-ino and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.berlecon.de/tw/osscompetition.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ber:bertw1:0005

Access Statistics for this paper

More papers in Berlecon Research Papers from Berlecon Research
Bibliographic data for series maintained by Thorsten Wichmann ( this e-mail address is bad, please contact ).