Leadership

Mixed Source

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Executive Summary

The authors study competitive interaction between a profit-maximizing firm that sells software and complementary services and a free open source competitor. They examine the firm's choice of business model between the proprietary model, the open source model, and the mixed source model. When a module is opened, users can access and improve the code, which increases quality and value creation. Opened modules, however, are available for others to use free of charge. They derive the set of possibly optimal business models when the modules of the firm and the open source competitor are compatible and incompatible

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