• Selected
• Entire List

Abstract:
Markets for operating systems are classic two-sided platforms, where the users of the operating system must purchase applications from application developers, but neither side internalizes the welfare impact of their adoption of the platform on the other side. Studies of competition and compatibility between two-sided platforms have tended to focus on cases where both platforms are owned by profit-maximizing firms. This paper specifically focuses on the effects of competition and compatibility between a profit-maximizing, or proprietary platform and an open, freely accessible platform. Under certain conditions, compatibility (meaning applications developed for one platform can be used on the other) can in fact be a profitable strategy even for a proprietary platform, and can benefit developers on both platforms. It also unambiguously improves social welfare in some cases, and there are cases where compatibility is welfare-improving but the proprietary platform has no incentive to invest in it.

two sided platforms, proprietary, open source, hotelling, compatibility, competition

Abstract:
Much work has been done in recent times to answer the question of why people contribute, and continue to contribute, to open-source and free software, despite the lack of immediate financial gain in most cases. Lerner and Tirole (2002) hypothesize that open-source contributions act as a form of job market signaling - they permit prospective employers to judge a person's ability directly. This paper tests the nature of this signaling using a complementarity framework. Do developers use open source software as a way to enhance the signal from a college education, or to substitute for it, in a form of learning by doing? I find evidence that they are complements, while conclusively rejecting the idea that they are substitutes.

open source software, complementarity, supermodularity

Abstract:
We investigate behavior in a sequential move voluntary contribution environment where three-player groups make all or nothing contribution decisions towards the provision of a public good. Our treatment varies the relative opportunity costs faced by subject members of the group, when payoffs and opportunity costs are complete information. We find that subjects who are assigned as first movers contribute regularly, which suggests an attempt towards encouraging further contributions down the line. Subsequent movers reciprocate more to such leadership gestures in the heterogeneous opportunity cost treatment than in the homogeneous opportunity cost treatment. We find that groups of subjects with heterogeneous opportunity costs can consistently sustain voluntary contribution in a sequential move public good game, since average contributions do not decline over time.

public good, experiment, reciprocity, open source software