Networked innovation and coalition formation: the effect of group-based social preferences

• Published in: Economics of innovation and new technology 2018-10, Vol.27 (7), p.577-593
• Main Authors: Dedeurwaerdere, Tom, Melindi-Ghidi, Paolo, Sas, Willem
• Format: Article
• Language: English
• Subjects: Coalition formation; Dissemination; Economic models; Economics and Finance; Empirical analysis; Humanities and Social Sciences; Influence; Innovations; Knowledge management; networked innovation; Open source software; open-source software (OSS); private-collective model; public knowledge goods; Repositories; social preferences; Software development; Source code
• ISSN: 1043-8599; 1476-8364
• DOI: 10.1080/10438599.2017.1378163

In this paper, we study the production and dissemination of public knowledge goods, such as technological knowledge, generated by a network of voluntarily cooperating innovators. We develop a private-collective model of public knowledge production in networked innovation systems, where group-based social preferences have an impact on the coalition formation of developers. Our model builds on the large empirical literature on voluntary production of pooled public knowledge goods, including source code in communities of software developers or data provided to open access data repositories. Our analysis shows under which conditions social preferences, such as 'group belonging' or 'peer approval', influence the stable coalition size, as such rationalising several stylized facts emerging from large-scale surveys of open-source software developers, previously unaccounted for. Furthermore, heterogeneity of social preferences is added to the model to study the formation of stable but mixed coalitions.