Template-Type: ReDIF-Paper 1.0
Author-Name:  Richard Schmidtke
Author-X-Name-First: Richard
Author-X-Name-Last: Schmidtke

Title:  Private Provision of a Complementary Public Good
Abstract: For several years, an increasing number of ¯rms are investing in
Open Source Software (OSS). While improvements in such a non-
excludable public good cannot be appropriated, companies can bene¯t
indirectly in a complementary proprietary segment. We study this
incentive for investment in OSS. In particular we ask how (1) market
entry and (2) public investments in the public good a®ects the ¯rms'
production and pro¯ts. Surprisingly, we ¯nd that there exist cases
where incumbents bene¯t from market entry. Moreover, we show the
counter-intuitive result that public spending does not necessarily lead
to a decreasing voluntary private contribution.
Length:  39 pages
Creation-Date:  2006-06
File-URL: http://www.bgpe.de/texte/DP/004_schmidtke.pdf
File-Format: Application/pdf
File-Function: First version, 2006
Number: 004
Classification-JEL: C72, L13, L86
Keywords: Open Source Software, Private Provision of Public Goods, Cournot-
Nash Equilibrium, Complements, Market Entry
Handle: RePEc:bav:wpaper:004_schmidtke