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Open Innovation in a Model à la Hotelling

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Abstract

This paper shows a model à la Hotelling in which profit-maximizing firms use either an open or a closed strategy to develop their software products. Only in the first case they can freely interchange information about their R&D, and the spillovers are higher the closer they are. What comes out is a clustering force that drives open firms to stay closer one another in the product characteristic space and which lead to believe that a sense of community is essential to work for an organizational model that is decentralized, modular and that cannot be planned in advance, like the Bazaar development model, used by open firms, is.

Suggested Citation

  • Bottai, Carlo, 2015. "Open Innovation in a Model à la Hotelling," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201526, University of Turin.
    • Handle: RePEc:uto:dipeco:201526
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