By extending Cournot model, this paper investigates how the appearance of open source software (OSS) affects the R&D risk in a market initially monopolized by proprietary software (PS) producer. The software market exhibits network externality. It is found that (i) the R&D risk level of PS producer in the market monopolized by PS isn't higher than in this market emerging OSS; (ii) there exist some R&D cost functions making R&D risk level be lower when PS producer monopolizes the market than when it competes with an OSS producer. © 2011 Published by Elsevier Ltd.
Xing, M. (2011). The R&D risk for proprietary software producer when open source software appears. In Procedia Engineering (Vol. 15, pp. 1382–1387). https://doi.org/10.1016/j.proeng.2011.08.256