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Why Do Developers and Firms Contribute to the Production of Open Source Software?

Jens Prufer
TILEC and CentER, Department of Economics, Tilburg University

January 3, 2006

Abstract:
This article explains why both software developers and firms contribute to the production of Open Source Software (OSS). Existing economic theories either focus on the supply side (developers) or the demand side (firms) of OSS development. This paper is the first to explain both sides in one integrated model by understanding the OSS production process as an application contest to the network of prominent developers. Programmers contribute because they aim for reputation and high salaries. Firms finance the process, since they receive inside information on highly talented developers not yet known on the regular job market.

Keywords: Open Source Software, Contest, Asymmetric Auctions, Networks, Career Concerns

JEL Classifications: D82, L14, L86

Working Paper Series

Date posted: September 16, 2004 ; Last revised: June 23, 2006

Suggested Citation

Prufer, Jens, Why Do Developers and Firms Contribute to the Production of Open Source Software? (January 3, 2006). Available at SSRN: http://ssrn.com/abstract=590581

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Contact Information

Jens Prufer (Contact Author)

TILEC and CentER, Department of Economics, Tilburg University ( email )

Warandelaan 2
NL-5000 LE Tilburg 5000 LE
Netherlands