The Jukebox Mode of Innovation - a Model of Commercial Open Source Development
Year: 2004
Type: preprint
Abstract: In this Paper, I explore the circumstances under which innovation processes without secrecy or intellectual property protection are viable, and where free revealing of innovations is a profit-maximizing strategy. Motivated by an empirical study of embedded Linux, I develop a duopoly model of quality competition. Firms require two complementary technologies as inputs, but differ with respect to the relative importance of these technologies. I find that a regime with compulsory revealing can lead to higher product qualities and higher profits than a proprietary regime. When the decision to reveal is endogenized, equilibria with voluntary revealing arise, again superior to the proprietary outcome.
Author: Joachim Henkel
Institution: Technical University of Munich
Language: English
Subfield: Computer Science Applications
Field: Computer Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W2157168142