Strategic Release and Co-creation: Empirical Insights for Managing Open-Source Software

Open-source development poses a strategic dilemma for core teams: when and how to release, and how actively to engage contributors, yet both compete for scarce team capacity. This paper develops a dynamic structural model to examine how these decisions are jointly managed over time, accounting for heterogeneity in cost structures across projects. Using detailed data from GitHub, we show that, whereas both release and co-creation positively influence community interest, the relative emphasis placed on them depends on community interest, operational burdens, and project-specific cost structures, with team capacity exerting a stronger influence on co-creation than on releasing. To understand how changing technology such as artificial intelligence (AI) tools might alter these dynamics, we conduct counterfactual simulations. Beyond efficiency gains that reduce development costs, the effects vary substantially by channel: when AI tools expand internal capacity, projects increase both release and co-creation activity; when they primarily drive external participation growth, co-creation increases, but release frequency remains largely unchanged. This pattern reflects an important asymmetry in how AI reshapes the development workflow: AI tools lower the cost of generating contributions without proportionally reducing the cost of reviewing them. More broadly, our findings offer a framework for understanding how digital tools and resource constraints interact to shape strategic decision making in crowd-sourced and collaborative innovation environments.

History: Yong Tan, Senior Editor; Chad Ho, Associate Editor.

Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2021.0601.