Crowding-in of complementary contributions to public goods: Firm investment into open source softwareMarkus Reisinger, Ludwig Ressner, Richard Schmidtke and Tim Thomes () Journal of Economic Behavior & Organization, 2014, vol. 106, issue C, 78-94 Abstract: We present a fairly general model in which firms are competitors in a commercial market segment and can invest into a complementary public good like open source software. We show that, contrary to standard predictions, additional contribution to the public good by the government or a new market entrant can lead to higher investments of all incumbent firms, that is, a crowding-in effect. This result occurs if the investment cost function is superadditive. We find that government contribution leads to larger crowding-in effects than subsidizing market entry if the price elasticity of demand with respect to the private good is large relative to the one with respect to the public good. Our results are robust to extensions in the timing and the mode of competition. Keywords: Investment crowding-in; Government contribution; Market entry; Open source software (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:106:y:2014:i:c:p:78-94 DOI: 10.1016/j.jebo.2014.06.005 Access Statistics for this article Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D. More articles in Journal of Economic Behavior & Organization from Elsevier |
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