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dc.contributor.authorAugust, Terrence
dc.contributor.authorChen, Wei
dc.contributor.authorZhu, Kevin
dc.date.accessioned2021-06-11T00:18:32Z
dc.date.available2021-06-11T00:18:32Z
dc.date.issued2021-05
dc.identifier.citationAugust, T., Chen, W., & Zhu, K. (2020). Competition Among Proprietary and Open-Source Software Firms: The Role of Licensing in Strategic Contribution. Management Science.en_US
dc.identifier.issn0025-1909
dc.identifier.doi10.1287/mnsc.2020.3674
dc.identifier.urihttp://hdl.handle.net/10150/659863
dc.description.abstractIn enterprise software markets, firms are increasingly using services-based business models built on open-source software (OSS) to compete with established, proprietary software firms. Because third-party firms can also strategically contribute to OSS and compete in the services market, the nature of competition between OSS constituents and proprietary software firms can be complex. Moreover, their incentives are likely influenced by the licensing schemes that govern OSS. We study a three-player game and examine how open-source licensing affects competition among an open-source originator, an open-source contributor, and a proprietor competing in an enterprise software market. In this regard, we examine (1) how quality investments and prices are endogenously determined in equilibrium, (2) how license restrictiveness impacts equilibrium investments and the quality of offerings, and (3) how license restrictiveness affects consumer surplus and social welfare. Although some in the open-source community often advocate restrictive licenses such as theGNUGeneral Public License because it is not always in the best interest of the originator for the contributor to invest greater development effort, such licensing can actually be detrimental to both consumer surplus and social welfare when it exacerbates this incentive conflict. We find such an outcome in markets characterized by software providers with similar development capabilities yet cast in favor of the proprietor. In contrast, when these capabilities either become more dispersed or remain similar but tilt in favor of open source, a more restrictive license instead encourages greater effort from the OSS contributor, leads to higher OSS quality, and provides a larger societal benefit. © 2020 INFORMS.en_US
dc.language.isoenen_US
dc.publisherInstitute for Operations Research and the Management Sciences (INFORMS)en_US
dc.rightsCopyright © 2020, INFORMS.en_US
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en_US
dc.subjectCo-creationen_US
dc.subjectCollaborative developmenten_US
dc.subjectLicensingen_US
dc.subjectOpen-source softwareen_US
dc.subjectProduct qualityen_US
dc.subjectSoftware competitionen_US
dc.subjectSoftware services marketen_US
dc.subjectStrategic contributions to open-source softwareen_US
dc.titleCompetition Among Proprietary and Open-Source Software Firms: The Role of Licensing in Strategic Contributionen_US
dc.typeArticleen_US
dc.identifier.eissn1526-5501
dc.contributor.departmentEller College of Management, University of Arizonaen_US
dc.identifier.journalManagement Scienceen_US
dc.description.note12 month embargo; published online: 05 October 2020en_US
dc.description.collectioninformationThis item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu.en_US
dc.eprint.versionFinal accepted manuscripten_US
dc.identifier.pii10.1287/mnsc.2020.3674
dc.source.journaltitleManagement Science
dc.source.volume67
dc.source.issue5
dc.source.beginpage3041
dc.source.endpage3066


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