article

Generating Value Through Open Source: Software Service Market Regulation and Licensing Policy

Authors:

Terrence August,

Tunay I. TuncaAuthors Info & Claims

Information Systems Research, Volume 29, Issue 1

Pages 186 - 205

https://doi.org/10.1287/isre.2017.0726

Published: 01 March 2018 Publication History

Abstract

In the software industry, commercial open-source software vendors have recognized that providing services to help businesses derive greater value in the implementation of open source-based systems can be a profitable business model. Moreover, society may greatly benefit when software originators choose an open-source development strategy as their products become widely available, readily customizable, and open to community contributions. In this study, we present an economic model to study how software licensing attributes affect a software originator's decisions, aiming to provide policy makers with insights into how welfare-improving, open-source outcomes can be incentivized. We show that when a competing contributor is apt at reaping the benefits of software development investment, a less restrictive open source license e.g., Berkeley Software Distribution, or BSD style can improve welfare. On the other hand, when the originator is better at leveraging investment and service costs are high, a more restrictive license e.g., General Public License, or GPL style can be best for social welfare even when a contributor can cost-efficiently develop the software.

The online appendix is available at <ext-link ext-link-type="uri" href="https://doi.org/10.1287/isre.2017.0726">https://doi.org/10.1287/isre.2017.0726</ext-link>.

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Cited By

Wang JHuang TLee J(2023)Cross-Licensing in a Supply Chain with Asymmetric ManufacturersManufacturing & Service Operations Management10.1287/msom.2019.047725:5(1855-1872)Online publication date: 1-Sep-2023
https://dl.acm.org/doi/10.1287/msom.2019.0477
Pei JYan PKumar S(2023)No Permanent Friend or EnemyManagement Science10.1287/mnsc.2023.473369:11(6800-6817)Online publication date: 1-Nov-2023
https://dl.acm.org/doi/10.1287/mnsc.2023.4733

Generating Value Through Open Source: Software Service Market Regulation and Licensing Policy
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cover image Information Systems Research

Information Systems Research Volume 29, Issue 1

March 2018

254 pages

ISSN:1526-5536

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INFORMS

Linthicum, MD, United States

Publication History

Published: 01 March 2018

Accepted: 11 April 2017

Received: 30 November 2015

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Cited By

Wang JHuang TLee J(2023)Cross-Licensing in a Supply Chain with Asymmetric ManufacturersManufacturing & Service Operations Management10.1287/msom.2019.047725:5(1855-1872)Online publication date: 1-Sep-2023
https://dl.acm.org/doi/10.1287/msom.2019.0477
Pei JYan PKumar S(2023)No Permanent Friend or EnemyManagement Science10.1287/mnsc.2023.473369:11(6800-6817)Online publication date: 1-Nov-2023
https://dl.acm.org/doi/10.1287/mnsc.2023.4733

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