Optimal Firm Contributions to Open Source Software

MANAGEMENT SCIENCE AND ECONOMICS, Christophe Deissenberg and Richard F. Hartl, eds., pp. 197-212, Springer, 2005

25 Pages Posted: 12 May 2008 Last revised: 7 Oct 2008

See all articles by Ernan Haruvy

Ernan Haruvy

University of Texas at Dallas - Naveen Jindal School of Management

Ashutosh Prasad

University of California, Riverside (UCR)

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Rong Zhang

Chongqing University - College of Economics and Business Administration

Abstract

This paper examines open source software development in a competitive environment. The quality of open source software improves over time based upon contributions by firms and users. A firm's decision to contribute is interesting because it also augments competitors' software quality in future periods subject to compatibility considerations with their existing software. A differential game model is developed to understand why firms are increasingly involved in open source software development by determining the optimal contributions and software quality over time. We obtain a closed-loop Nash equilibrium solution. Examples are given to derive insights from this model.

Keywords: Open sourcd software, dynamic games, game theory, differential games, optimal control, close-loop Nash equilibrium, software quality

JEL Classification: C61, D42, M00

Suggested Citation

Haruvy, Ernan and Prasad, Ashutosh and Sethi, Suresh and Zhang, Rong, Optimal Firm Contributions to Open Source Software. MANAGEMENT SCIENCE AND ECONOMICS, Christophe Deissenberg and Richard F. Hartl, eds., pp. 197-212, Springer, 2005. Available at SSRN: https://ssrn.com/abstract=1128753

Ernan Haruvy

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Ashutosh Prasad

University of California, Riverside (UCR)

900 University Avenue
Riverside, CA 92521
United States

Suresh Sethi (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road, SM30
Richardson, TX 75080-3021
United States

Rong Zhang

Chongqing University - College of Economics and Business Administration ( email )

Chongqing 400030
China

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