Dynamic mixed duopoly
Subtitle: a model motivated by Linux vs. Windows
By: Ramon Casadesus-Masanell, Pankaj Ghemawat
Contributors: Ghemawat, Pankaj; Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 04-012; Working paper (Harvard Business School. Division of Research) -- 04-012
Publisher: Division of Research, Harvard Business School
Published: 2003
Place of publication: Boston]
Language: eng
Number of pages: 41
Description: 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.
Notes: Includes bibliographical references.