Supply chains today routinely use third parties for many strategic activities, such as manufacturing, R&D, or software development. These activities often include relationship-specific investment on the part of the vendor, while final outcomes can be uncertain. Therefore, writing complete...

Incomplete contracts may involve a hold-up problem, resulting in inefficient levels of investment. In this paper, we model the phenomenon as a sequential move game with asymmetric information regarding quality. Absence behavioral considerations, the unique Perfect Bayesian Equilibrium implies...

The open source paradigm is often defined as a collaborative effort, implying that firms and consumers come together in a non-competitive climate. We show here that open source development can arise from a competitive climate. Under competition, we find that open source is the surplus maximizing...

Firms have the choice of developing software as either open source or closed source. The open-source approach to software development has been advocated as a new and better method for developing high quality software than the traditional closed-source approach. In open source, volunteer...

A commonly observed two-stage pricing strategy for a custom-made product involves a prepurchase entry fee for a potential consumer and a purchase price if he decides to buy the product. We solve and compare two settings: In the first, the firm does not commit in advance to the second-stage price...