Vidya Atal

Open Source Software: Competition with A Public Good

This paper looks at price and quality competition in software markets under two different forms of competition - one where two proprietary firms first choose quality and then engage in price competition, and second where a proprietary firm faces competition from an open source software firm that allows its users to determine quality level and provides the software at zero price. We find that OSS competition never improves quality for consumers who value quality highly. However, it may provide greater quality to users with a low valuation for quality. In addition, we find that although OSS has a zero market price, the public good nature of OSS competition can lessen price competition, making the proprietary firm better-off with increased profit but leaving consumers worse-off with lower surplus.

Project Selection: Commitment and Competition

We examine project selection decisions of firms constrained in the number of projects they can handle at once. A new project opportunity arises every period. Taking on a project requires a commitment of uncertain duration, preventing the firm from selecting another project in subsequent periods until the commitment ends. In our dynamic game, when two firms are free of commitment, they move sequentially in random order. Symmetric pure strategy Markov perfect equilibria always exist. In equilibrium, the first mover strategically rejects some projects that are then selected by the second mover, even when the value of the project is the same for both firms. A monopolist rejects more projects, and adopts ones of higher average quality compared to the duopolist. Duopolists select too few projects compared to their jointly optimal behavior. We extend the model to allow for externalities, asymmetry, and n>2 firms.

Say at Home, or Stay at Home? Policy Implications on Female Labor Supply and Empowerment

This paper develops a theory of female labor supply in a general equilibrium framework in the context of a developing economy. In stage 1, men and women decide whether to get married foreseeing the power and market dynamics in stage 2. Single people make their own decisions whereas married couples make decisions together, the power distribution among partners is determined endogenously. It is shown that female labor supply can take different shapes due to structural differences between economies and multiple equilibria might occur, causing low female labor force participation trap. As for policy implications, we find that tax-break to the employers can give a huge boost to female employment and may reduce the wage-gap. However, tax-benefit to women may widen the wage-gap although both these policies empower women. We also conclude that true empowerment should come with the freedom of choice (to work); increasing female labor force participation does not necessarily empower women. Results found here resonate well with previous empirical findings and suggest additional testable implications.

Aggregate Effects of Women's Empowerment

How do shifts in intra-household gender dynamics affect the economy at large? This paper parametrizes intra-household gender-powered decision-making and endogenous distributions of income to allow for the aggregation of key macroeconomic variables. In equilibrium, we find that greater womens empowerment increases precautionary savings to offset low endowment realizations. The effect is stronger among poor households who hedge against hitting a subsistence bound. Given the boost in savings at the bottom of the distribution, more empowerment leads to less poverty and lower income inequality. Another equilibrium prediction of the model is an increase in the households food intake regardless of income, reflecting womens greater preference for food compared to men. The models predictions are mapped to Mexicos 2014 National Household Income and Expenditure Survey which identifies the gender of the head of the household. These predictions have policy implications in the areas of monetary policy, social policy, financial intermediation and banking.

Developers' Incentives and Open Source Software Licensing: GPL vs. BSD

One of the puzzling aspects of open-source software (OSS) development is its public good nature. Individual developers contribute to developing the software, but do not hold the copyright to appropriate its value. This raises questions regarding motives behind such effort. We provide an integrated model of developers’ incentives to describe OSS development and compare restrictive OSS licenses that force all modifications to be kept open with non-restrictive OSS licenses that allow proprietary ownership of modified works. Different incentives govern effort provision at different stages of the software development process. We show that open-source licenses can provide socially valuable software when a proprietary license fails to do so. We also show that restrictive OSS licenses generate greater effort provision in the design stage of software development relative to non-restrictive licenses. Endogenizing licensing choice, we find that a project leader chooses a non-restrictive OSS license if reputational concerns drive developers’ incentives, a proprietary license when there is a large population of users in the market and a restrictive OSS license if user population is small but reputational benefit is high. Our results resonate well with empirical findings and suggest additional testable implications about the relationship between licensing and software project characteristics. Finally, we also find that the market under-provides restrictive OSS licenses relative to the efficient level, suggesting the need for subsidizing restrictive licenses in some cases.