Dynamics of Open Source Movements

33 Pages Posted: 25 Oct 2010  

Susan Athey

Stanford Graduate School of Business

Glenn Ellison

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 25, 2010

Abstract

This paper considers a dynamic model of the evolution of open source software projects, focusing on the evolution of quality, contributing programmers, and users who contribute customer support to other users. Programmers who have used open source software are motivated by reciprocal altruism to publish their own improvements. The evolution of the open-source project depends on the form of the altruistic benefits: in a base case the project grows to a steady-state size from any initial condition; whereas adding a need for customer support makes zero-quality a locally absorbing state. We also analyze competition by commercial firms with OSS projects. Optimal pricing policies again vary: in some cases the commercial firm will set low prices when the open-source project is small; in other cases it mostly waits until the open-source project has matured.

JEL Classification: D64, L17

Suggested Citation

Athey, Susan and Ellison, Glenn, Dynamics of Open Source Movements (October 25, 2010). CESifo Working Paper Series No. 3215. Available at SSRN: https://ssrn.com/abstract=1697473

Susan Carleton Athey

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Glenn David Ellison (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-380B
Cambridge, MA 02142
United States
617-253-8702 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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