Incentives for Developers’ Contributions and Product Performance Metrics in Open Source Development: An Empirical Exploration

In open source software development, users rather than paid developers engage in innovation and development without the direct involvement of manufacturers. This paradigm cannot be explained by the two traditional models of innovation, the private investment model and the collective action model. Neither model in itself can explain the phenomenon of the open source model or its success. In order to bridge the gap between existing models and the open source phenomenon, we analyze data from a web survey of 160 open source developers. First, we investigate the motives affecting the individual developer’s contributions by comparing and contrasting the incentives from both the traditional private investment and collective action models. Second, we demonstrate that there is a common ground between the private and collective models where private returns and social considerations can coexist. Third, we explore the effect of incentives on the output of innovation—final product performance. The results show that the motivations for individual developer’s contributions are quite different from the incentives that affect product performance.

Final Bid Price Estimation for Negotiated Contracts: Bargaining Game Theory Approach

The wide use of the low bid method by employers for awarding construction contracts has created an aggressively competitive environment among contractors in the construction industry. As a result, a contractor may resort to use a low mark-up percentage for his bid to increase his chances of winning, which may lead to losses and conflicts in case he is awarded the project. Additionally, a contractor who reaches the final negotiations stage for a certain project is faced by the dilemma of the minimum discount percentage he may need to offer to the employer that maximizes his chance to win the project. This research presents the framework for a decision support tool / model that uses bargaining game theory to help contractors make rational decisions regarding the discount percentage to offer to the employer during negotiations in order to establish a win-win scenario in which the employer gets the lowest possible price for his project and at the same time the contractor’s profit is maximized. The developed Monte Carlo simulation based python model uses the source code of Gambit in order to determine the Nash Equilibrium of a typical negotiation process in private sector projects; where negotiations are allowed, contractors are procured through competitive bidding, and the low bid method is used for awarding the contracts. The negotiation process is depicted by a game composed of three players (two contractors and one employer), through a two stage negotiation process. Moreover, a real case study of a hospital mega project in Egypt is used to validate the developed python model. The analysis of this case study showed that using the developed model by the winning contractor could have saved him almost 299.5 M EGP of unnecessary discount offered to the employer. Additionally, another objective of this research is to determine and rank the factors that affect the level of aggression (bargaining power) of the two negotiating parties (employer/contractor) in the Egyptian market

A supply side story for a threshold model: Endogenous growth of the free and open source community

The study of social institutions producing and disseminating knowledge has mainly concentrated on two main concepts: Science and Technology. This paper examines a recent institutional form that seems not to resemble either of the other two; that is, knowledge-intensive communities, where individuals freely exchange knowledge through information and communication technology. Using free and open source software as an example, we develop a model where this phenomenon is confronted with Technology with respect to its ability to attract researchers.

Co-evaluation of climate services. A case study for hydropower generation

Climate services are attracting growing attention and interest as instruments to promote climate change adaptation. The transparent assessment of the potential value brought by the services can play a major role. It can foster the commitment of the user towards a co-generation process increasingly central to climate services creation, can provide developers important information to better tailor the service to the user needs, and can finally increase recognition of the value of the service boosting confidence and trust in the tool. This study presents and then demonstrates the applicability of an evaluation methodology based on the Bayesian framework derived from the information value theory. The specific case study is the Smart Climate Hydropower Tool (SCHT), a climate service designed to support management decisions in hydropower generation. The service uses freely available seasonal forecasts and machine learning algorithms to predict incoming discharge to hydropower reservoirs. The user is ENEL Green Power Italy, and the testing environments are two water basins in Colombia. The study defines the expected value of perfect information, the expected value of the information currently used by the hydropower producer and the expected value of the service information. It then discusses pros and cons of the applicability of the method

The State of Open Government Data in Dutch Municipalities: Transparency, Accountability & Innovation

This MaRBLe projects focusses on Open Government Data (OGD) in Dutch municipalities. This is government published data that available for anyone to use and reuse without any restrictions and no costs. This type of information is not just published with the aim of enhancing government transparency but is supposed to have positive outcomes on innovation as well. Through interviews with relevant stakeholders in the OGD publication process, such as Dutch municipalities and NGOs, this paper identifies which problems have hampered the potential benefits of OGD from not being fully realized yet. It concludes that in each phase of the publication process there are various problems that obstruct the effective usage of OGD.

Open Source Software: The New Intellectual Property Paradigm

Open source methods for creating software rely on developers who voluntarily reveal code in the expectation that other developers will reciprocate. Open source incentives are distinct from earlier uses of intellectual property, leading to different types of inefficiencies and different biases in R&D investment. Open source style of software development remedies a defect of intellectual property protection, namely, that it does not generally require or encourage disclosure of source code. We review a considerable body of survey evidence and theory that seeks to explain why developers participate in open source collaborations instead of keeping their code proprietary, and evaluates the extent to which open source may improve welfare compared to proprietary development.

Rationales for Real Estate Leasing versus Owning

In this article, rationales for the widespread existence of commercial real estate leasing are examined. Given the tendency of tenants to abuse property to their own advantage, there must be powerful incentives on the other side to encourage landlords and property managers to participate in the widespread practice of leasing. We suggest that common leasing practices are the consequence of many rationales, including the ability of the landlord to solve free-rider problems in maintaining property desirability and informational asymmetries that exist between landlords and tenants.

Law and economics of Microsoft vs. U.S. Department of Justice - New paradigm for antitrust in network markets or inefficient lock-in of antitrust policy?

This paper contains an economic and legal analysis of the lawsuit Microsoft vs. U.S. Department of Justice beginning with the District Court's decision on June 7, 2000 up to the Proposed Final Judgement on November 6, 2001. I found that the courts' underlying economic paradigm regarding the assessment of monopoly power in 'New Economy Network Markets' was strongly influenced by BRIAN W. ARTHUR's theory of path dependence claiming (1) that high-technology markets being subject to network effects generally involve a danger of being locked-in to an inferior technology since winning or losing in a technology race is determined by small early random historical events and not by economic efficiency and (2) that there is almost no possibility to overcome inferior lock-in positions since network (compatibility) effects create insurmountable switching costs protecting the lock-in monopolist. As to Microsoft, it was often claimed that Macintosh would have been the better solution than Windows. The U.S. courts are convinced that rivals such as Linux wouldn't have any chance to overcome Microsoft's lock-in position without any antitrust intervention. However, I argue in accordance with opponents of ARTHUR's work that path dependence theory is only a theoretical curiosity that lacks empirical evidence. The predominance of a certain technology and especially the predominance of Windows in the operating system market is determined by economic efficiency and dominant market positions can be eroded very quickly by providing better quality. There is no empirical indication that network effects protect Microsoft's monopoly as it was claimed by the courts within their 'applications barrier to entry' theory. I claim that current interpretations of the U.S. antitrust law don't meet the requirements of fair competition rules in the 'New Economy'. If plaintiffs and the U.S. Department of Justice are victorious over Microsoft and lock-in theories become generally accepted by courts and market participants, further antitrust lawsuits are going to follow since most markets in the 'New Economy' are subject to network effects and high seller concentration. Strict antitrust policy could dampen economic growth due to investor uncertainty and the impossibility to take advantage of scale-based productivity effects. --Microsoft,antitrust,network effects,path dependence