AbstractBy modifying Cournot model, this paper compares the R&D competition in a duopoly industry when two proprietary software (PS) producers compete and when a proprietary software producer competes with open source software (OSS) producer. This paper assumes proprietary software producer pursues profit maximization and open source software is free for users. It is find that: (i) when the learning (maintenance or development) cost of OSS is big (resp. small) enough, the R&D effort of PS producer in a industry where PS compete with OSS is higher (resp. lower) than when it competes with PS; (ii) when software reservation prices for PS and OSS are same, the R&D effort of PS producer when it competes with OSS producer is higher (resp. lower) than competes with PS producer if user's software development skill is low (resp. high) enough; (iii) PS producer is more (resp. less) likely to choose the highest (resp. lowest) R&D risk projects when it competes with an OSS producer than competes with a PS producer in a software industry.