Open Source Software: Free Provision of Complex Public Goods
25 Pages Posted: 30 Jul 2001
Date Written: July 2005
Abstract
Open source software, developed by volunteers, appears counter to the conventional wisdom that private provision of public goods is socially more efficient. But complexity makes a difference. Under standard models, development contracts for specialized software may be difficult to write and ownership rights do not necessarily elicit socially optimal effort. I consider three mechanisms that improve the likelihood that firms can obtain the software they need: pre-packaged software, Application Program Interfaces (APIs) and Free/Open Source software (FOSS). I show that with complex software, some firms will choose to participate in FOSS over both "make or buy" and this increases social welfare. In general, FOSS complements proprietary provision, rather than replacing it. Pre-packaged software can coexist in the marketplace with FOSS: pre-packaged software addresses common uses with limited feature sets, while firms with specialized, more complex needs use FOSS.
Keywords: Software, Contracting, Information Goods, Complexity
JEL Classification: H41, L22, L86
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Simple Economics of Open Source
By Jean Tirole and Josh Lerner
-
The Simple Economics of Open Source
By Jean Tirole and Josh Lerner
-
How Open Source Software Works: 'Free' User-to-User Assistance?
-
By Karim R. Lakhani and Robert G. Wolf
-
Open Source Software and the 'Private-Collective' Innovation Model: Issues for Organization Science
-
The Economics of Technology Sharing: Open Source and Beyond
By Jean Tirole and Josh Lerner
-
The Economics of Technology Sharing: Open Source and Beyond
By Jean Tirole and Josh Lerner
-
Community, Joining, and Specialization in Open Source Software Innovation: A Case Study
By Georg Von Krogh, Sebastian Spaeth, ...