The Impact of Network Externalities on the Competition Between Open Source and Proprietary Software

摘要: In this paper, we build analytical models to examine the impact of network externalities on competition between open source software (OSS) and proprietary software. We investigate competing OSS products with comparable functionalities in four different scenarios depending whether they are compatible each other underlying market is fully covered (i.e., all consumers adopt one two products). Furthermore, study which party has most incentive make its product counterpart. When covered, installed base profit increase at expense a decreasing user for presence externalities. This competitive imbalance becomes more pronounced when incompatible partially covered. Finally, find that externalities, being rival not desirable software, but highly beneficial community.