Open source license, piracy and their impacts on the quality of information goods

Abstract

This thesis consists of two essays on Open Source Software (OSS) and piracy in the information industry. The essays deal with the impact of the OSS and piracy on the decisions of a firm such as pricing and versioning strategy. Since the market power of information providers and their profits from selling the information goods are basically dependent on how strictly the intellectual property right is protected, they are considered to be threatened by the rise of the piracy and the OSS. However, in reality, many of the information technology firms have already been adopted the OSS business models or seek the ways of using the copyright infringement as a competitive weapon to enlarge the installed base and finally hold the market standard. Therefore, the wave of OSS and the piracy can play an important role as a business opportunity for the information providers and leads the shift in paradigm in the information industry in the long run. The first essay focuses on the choice of the OSS license and its impacts on the OSS quality and the competition between the OSS and the commercial software. The second essay explores the effect of piracy on the quality decisions of a firm that produces two versions of information goods The first essay analyzes the OSS project manager’s choice of the OSS license between restrictive license and permissive one and explores its impacts on the OSS quality and the competition with the commercial software. The OSS license affects not only the development stage of the OSS but also market competition stage. The main conclusion is that OSS developers face the trade-off between the gain from superior quality of OSS by choosing the restrictive license and the gain from the alleviated competitive pressure with the commercial software by choosing the permissive one. Therefore, it is desirable to choose the restrictive license when the number of developers who participate in the project is critical for the success of the OSS. By the same toke...