Public Provision of a Private Good: What is the Point of the BSD License?
27 Pages Posted: 1 Oct 2006 Last revised: 14 May 2014
Date Written: July 25, 2005
Software is a potentially excludable public good. It is possible, at some cost, to exclude non-paying users from its consumption by using copyright law or technological restraints. Licensing the software under proprietary license terms makes of it a private good, licensing it under the BSD does not change the economic nature of the software while licensing it under the GPL artificially makes of it a pure public good. A project leader will prefer one or the other of those license terms depending on her software project's market potential and on the cost of developing it. The optimal licensing for a sequence of cumulative innovations and the impact of possible competition between rival software development teams are considered.
Keywords: Open Source Software, Public Goods, Information Goods, Non-Profit, Volunteer Organisation, Intellectual Property, Copyright, Licensing, Innovation
JEL Classification: D23, D45, D71, D86, H41, H42, K11, L31, L86, O31
Suggested Citation: Suggested Citation