Strategies for technology -oriented firms

Improved communication between firms and individuals due to advances in information technology is the reason for many new business strategies firms adopt. This thesis examines two such situations. The first of them focusses on a programmer's motivation to engage in open source projects and the effect on the firm that employs them. In situations where a programmer's talent is not perfectly known or when there are valuable lessons to be learned from open source programming, the firm and the programmers may both benefit from devoting some effort and attention to open source projects. The programmers gain valuable experience and the firm gains from better execution of the proprietary project. In addition, the programmers may be able to signal their talent in the labor market through good performance in open source. We characterize the optimal incentive contracts offered by the firm in such situations.;We also examine the role of communication in Internet commerce. Online customers are often unaware of the web site addresses of retailers selling a product they would like to buy. Therefore, web retailers use broadcast and search advertising to inform customers of their existence. Use of search advertising by a monopoly retailer may increase advertising costs and may not increase social welfare. If the customers are also uninformed about the quality of a retailer's product, the retailer selling a high quality product would use search advertising as a signaling device when the quality differential between the high and low quality products is small. We also consider duopoly situations where one or both retailers are unknown to customers.;The information technology revolution has been fueled by the availability of a large number of software products. Firms selling these products typically introduce improved versions one after the other. We characterize the optimal timing strategy for introducing the updated versions over the life cycle of the product in homogeneous user markets. We also examine the optimal timing in the context of heterogenous user markets where multiple marketing strategies are possible. The insights we obtain are useful in managing the R&D and marketing effort of firms.