Open Source Development with a Commercial Complementary Product or Service

Haruvy, Ernan; Sethi, Suresh P.; Zhou, Jing

doi:10.3401/poms.1070.0004

Cited by 41 publications

(39 citation statements)

References 41 publications

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“…On the practical level, when designing pricing mechanisms, companies can use social preferences to increase profits. For example, in the open-source software development (23), satisfied consumers may choose to pay more than required or to invest more effort to reward such a company for its product, paying a fair price for the good.…”

Section: Resultsmentioning

confidence: 99%

Pay-what-you-want, identity, and self-signaling in markets

Gneezy

Riener

et al. 2012

Proc. Natl. Acad. Sci. U.S.A.

256

269

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We investigate the role of identity and self-image consideration under "pay-what-you-want" pricing. Results from three field experiments show that often, when granted the opportunity to name the price of a product, fewer consumers choose to buy it than when the price is fixed and low. We show that this opt-out behavior is driven largely by individuals' identity and self-image concerns; individuals feel bad when they pay less than the "appropriate" price, causing them to pass on the opportunity to purchase the product altogether.fairness | social preferences | behavioral pricing A lthough social norms encourage nonselfish behavior (1-4), self-interest is clearly a powerful motive in markets. This raises two important questions with respect to the economic consequences of nonselfish behavior: Is nonselfish behavior important in markets, and if so, how does it operate?A pricing scheme known as "pay-what-you-want" (PWYW) can help answer both of these questions. To address the first question, nonselfish behavior in the form of PWYW definitely exists in markets. Perhaps the most famous case of PWYW is the release of the band Radiohead's album "In Rainbows" in 2007. Fans were invited to download the album from the band's Web site for any price they chose, including nothing. If fans could get the album for free, why would they pay? However, they did. Hundreds of thousands of fans chose to pay for something they could have received for free, and Radiohead collected hundreds of thousands of dollars from its album sales. Other artists (e.g., Girl Talk) and video game companies (e.g., World of Goo) also have had some level of success in using PWYW. The continued use of PWYW by for-profit organizations (as opposed to, e.g., museums or charities) allows the rejection of the straw man model of pure selfishness in markets. Nevertheless, a closer look at these attempts highlights the importance of the second question: What motivates people to behave nonselfishly in markets? Understanding the reasons for individuals' nonselfish behavior can improve our understanding of how markets work, and help guide the design of institutions based on such behavior.We report results from three field experiments (5, 6) using PWYW to show that individuals' nonselfish behavior is influenced, at least in part, by concerns related to self-image. The basic argument is that people want to maintain a sense of being good and fair. That is, individuals derive utility from prosocial behavior as a signaling mechanism; when an individual behaves prosocially, she is judged more positively by others as well as by herself. The evidence provided in this paper converges to support our proposition that self-image plays an important role in individuals' payment decisions under PWYW.The first piece of evidence presented here is based on a recent field experiment conducted in collaboration with large amusement park that involved selling photos taken during a ride at the park (7). We compared a regular PWYW pricing scheme with a PWYW variation in which half of the re...

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Section: Resultsmentioning

confidence: 99%

Pay-what-you-want, identity, and self-signaling in markets

Gneezy

Riener

et al. 2012

Proc. Natl. Acad. Sci. U.S.A.

256

269

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“…MOT-POM 2008-2016 Articles in the first MOT Special issue of POM in 2008 and articles published by the MOT department since that time have deepened our understanding of MOT in several ways. A set of papers have examined how innovations in technology impact firm performance (Cheng et al 2015, Druehl and Schmidt 2008, Fung 2008, Haruvy et al 2008, Ji et al 2011, Kim et al 2011, Kort and Zaccour 2011, Lee and Mendelson 2008, Mehra et al 2014, Wei and Nault 2014. Another set of papers have examined how technological innovations both impact and are impacted by the internal organization and the external marketplace.…”

Section: Fundamentals Of the Management Of Technologymentioning

confidence: 99%

Towards Building Multidisciplinary Knowledge on Management of Technology: An Introduction to the Special Issue

Gaimon

Hora

Ramachandran

2017

Production and Operations Management

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Management of technology (MOT) concerns the processes by which innovations in technology are transformed to ultimately diffuse into the marketplace. As such, operations management contributes to the multidisciplinary realm of MOT through its study of a firm's resource capabilities. This special issue offers a broad and deep discussion on the interface between MOT and POM. The contributions of the MOT special issue are fourfold. First, we invited scholars from a variety of disciplines to write papers that highlight a broad perspective of emerging problems in MOT that can be addressed by POM researchers. Second, a set of contributed papers is included in the special issue spanning several themes at the intersection of POM and MOT. Third, much of this article is devoted to a deep discussion of an emerging theme that represents a fundamental challenge to the modern, knowledge‐intensive firm. Specifically, we explore how firms develop and leverage internal and external knowledge‐based resource capabilities to respond to the dynamic opportunities and threats created by innovations in technology. Lastly, we provide a comprehensive discussion of future research opportunities that relate to the challenges in managing the knowledge‐intensive firm.

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“…Additionally, the value of a network or group involvement in innovation has been highlighted in the literature. A recent theme is one involving the notion of “open innovation,” defined by Chesbrough (, p. xxiv) as “a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.” The information systems community embraces these concepts via the open source software movement, which advocates sharing source code for software programs to enhance the overall performance (Haruvy, Sethi, & Zhou, ), and the status of the participants (Roberts, Hann, & Slaughter, ). One particular mechanism that has received attention in contemporary literature related to the open source theme is the use of an “innovation contest” to generate ideas and/or solve novel problems for a firm.…”

Section: Innovation and Technology Managementmentioning

confidence: 99%

Introduction to Innovation WITHIN and ACROSS Borders: A Review and Future Directions

2015

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Innovation is an integral part of every firm's ongoing operations. While new product and service creation is an essential task to ensure a firm's immediate success in the marketplace, process and supply chain innovations can also create a unique source of competitive advantage for the future. Encouraging innovative thinking, developing new innovations, and managing the processes by which those innovations are developed are critical aspects of today's firm. Consequently, research which aids in the creation and maintenance of innovative firms is an important topic of inquiry for research communities on innovation management, including the operations management and information systems communities. We review the literature in this important area and offer suggestions for future research on the following topics: innovation within a firm and across the supply chain, technology management, and new product and service development.

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Open Source Development with a Commercial Complementary Product or Service

Abstract: Opening the source code to a software product often implies that consumers would not pay for the software product itself. However, revenues may be generated from

Cited by 41 publications

References 41 publications

Pay-what-you-want, identity, and self-signaling in markets

Pay-what-you-want, identity, and self-signaling in markets

Towards Building Multidisciplinary Knowledge on Management of Technology: An Introduction to the Special Issue

Introduction to Innovation WITHIN and ACROSS Borders: A Review and Future Directions

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