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Competition Among Proprietary and Open-Source Software Firms: The Role of Licensing in Strategic Contribution
Management Science ( IF 4.6 ) Pub Date : 2020-10-05 , DOI: 10.1287/mnsc.2020.3674
Terrence August 1, 2 , Wei Chen 3 , Kevin Zhu 1
Affiliation  

In enterprise software markets, firms are increasingly using services-based business models built on open-source software (OSS) to compete with established, proprietary software firms. Because thirdparty firms can also strategically contribute to OSS and compete in the services market, the nature of competition between OSS constituents and proprietary software firms can be complex. Moreover, their incentives are likely influenced by the licensing schemes that govern OSS. We study a three player game and examine how open-source licensing affects competition among an open-source originator, open-source contributor, and a proprietor competing in an enterprise software market. In this regard, we examine: (i) how quality investments and prices are endogenously determined in equilibrium, (ii) how license restrictiveness impacts equilibrium investments and the quality of offerings, and (iii) how license restrictiveness affects consumer surplus and social welfare. Although some in the open-source community often advocate restrictive licenses such as GPL, because it is not always in the best interest of the originator for the contributor to invest greater development effort, such licensing can actually be detrimental to both consumer surplus and social welfare when it exacerbates this incentive conflict. We find such an outcome in markets characterized by software providers with similar development capabilities yet cast in favor of the proprietor. On the other hand, when either these capabilities become more dispersed or remain similar but tilt in favor of open-source, a more restrictive license instead encourages greater effort from the OSS contributor, leads to higher OSS quality, and provides a larger societal benefit.

中文翻译:

专有和开源软件公司之间的竞争:许可在战略贡献中的作用

在企业软件市场中,公司越来越多地使用基于开源软件(OSS)的基于服务的业务模型来与已建立的专有软件公司竞争。由于第三方公司还可以在战略上为OSS做出贡献并在服务市场中竞争,因此OSS成分与专有软件公司之间的竞争性质可能很复杂。此外,其激励措施可能受到管理OSS的许可计划的影响。我们研究了一种三人游戏,并研究了开放源代码许可如何影响开放源代码的发起者,开放源代码的提供者以及在企业软件市场中竞争的所有人之间的竞争。在这方面,我们研究:(i)如何在均衡中内生地确定优质投资和价格,(ii)许可证限制如何影响均衡投资和产品质量,以及(iii)许可证限制如何影响消费者剩余和社会福利。尽管开源社区中的某些人经常提倡使用限制性许可(例如GPL),因为贡献者投入更多的开发精力并不总是符合发起者的最大利益,但这种许可实际上可能不利于消费者剩余和社会福利。当它加剧了这种激励冲突时。我们在以具有类似开发能力的软件提供商为特征的市场中找到了这样的结果,但这些产品仍受到所有者的青睐。另一方面,当这些功能变得更加分散或保持相似但倾向于开源时,
更新日期:2020-10-05
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