Does possessing an installed base induce a proprietary software producer to act aggressively or mildly in pricing and intrinsic quality provision?

Abstract

It is common to observe software markets with competition between open-source software (OSS) and proprietary software (PS). This kind of market generally has some common features. First, as mentioned in Sen ( 2007), OSS is usually the late entrant which leads to the fact that PS has accumulated users as an installed base at the time of OSS entering the market. Second, due to asymmetric designs, compatibility between OSS and PS is not only asymmetric but also partial as well. If consumers buy PS, then they may enjoy full network benefits of PS installed base naturally. However, due to partial compatibility between OSS and PS, consumers can only enjoy network benefits of PS installed base partially if they use OSS. Third, PS usually has more