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Incentives, Mechanisms and Platform Design for IT-enabled Open Innovation: Lessons from Online Communities and Open-Source Software

  • Author(s): Chen, Wei
  • Advisor(s): Zhu, Kevin
  • et al.
Abstract

In the past decade, information technology (IT) has changed how we produce knowledge and goods towards an open and collaborative way. At the same time, new issues challenge how we manage this open model. We need a better understanding of the incentives of the participants, as well as the mechanisms that impact these incentives, to design better such IT systems that enable the open production model. This dissertation is a first step to address these issues by learning from open-source software and online communities, focusing on the incentives, mechanisms, and design of IT systems.

Chapter 1 examines how motivating mechanisms, such as badges, votes, and status systems, dynamically engage the users and impact their contributions. We find that the effect of motivating mechanisms on user motivation is not uniform across users over time. For example, we find that badges could suffer a negative effect when a user is already engaged. Chapter 2 focuses on how open-source licensing affects competition among open-source and proprietary software. OSS license schemes serve as a means to govern the intellectual property. Distinct licenses each have different restrictions, which in turn affect the incentives of contributions. We build a game-theoretical model to understand how license restrictiveness impacts investments and the quality of services brought to market. Chapter 3 studies release frequency as a coordinating device in the adoption and evolution of OSS projects. We find that release frequency has a curvilinear relationship with both download and community contribution. Furthermore, when the costs are high, fast release frequency may decrease the consumers’ incentive to adopt and even exhaust the community’s incentive to contribute.

This body of work helps understand the incentives of individuals and firms who participate in the open production model. Our results offer managerial implications to firms that are formulating strategies to participate in such open production models, and provide insights for the design of IT platforms that enable the open models.

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