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Does possessing an installed base induce a proprietary software producer to act aggressively or mildly in pricing and intrinsic quality provision?

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  • Chung‐Hui Chou

Abstract

This paper investigates competition between open‐source software (OSS) and proprietary software (PS) which possesses an installed base. We find that an increase in PS installed base does not necessarily induce the PS producer to increase price or reduce intrinsic quality. Specifically, if OSS is weakly (moderately) compatible with PS, then an increase in PS installed base induces the PS producer to invest less (more) in intrinsic quality. Regarding the price of PS, if OSS is highly compatible with PS possessing a large installed base, then an increase in installed base induces the PS producer to sell products for a lower price.

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  • Chung‐Hui Chou, 2023. "Does possessing an installed base induce a proprietary software producer to act aggressively or mildly in pricing and intrinsic quality provision?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(2), pages 133-143, May.
    • Handle: RePEc:bla:scotjp:v:70:y:2023:i:2:p:133-143
    DOI: 10.1111/sjpe.12335
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