Publications
Publications
- 2003
- HBS Working Paper Series
Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows
By: Ramon Casadesus-Masanell and Pankaj Ghemawat
Abstract
This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open-source operating system, and Microsoft's Windows in the computer server segment, and consequently emphasizes demand-side learning effects that generate dynamic scale economies (or network externalities). Analytical characterizations of the equilibrium under such conditions are offered, and some comparative static and welfare effects are examined.
Keywords
Business Model; Competition; Open Source Distribution; Balance and Stability; Applications and Software; Network Effects; Duopoly and Oligopoly
Citation
Casadesus-Masanell, Ramon, and Pankaj Ghemawat. "Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows." Harvard Business School Working Paper, No. 04-012, August 2003.