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Private Benefits, Warm Glow, and Reputation in the Free and Open Source Software Production Model

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  • JOHN P. CONLEY
  • FAN-CHIN KUNG

Abstract

A great deal of production and consumption behavior takes place in the context of social organizations that seem to fall outside of the traditional paradigm of profit/utility maximization. These organizations are voluntary in nature and rely on contributions from members to achieve their objectives. Examples include the Linux operating system and other FOSS projects, political movements, churches and religious groups, Habitat for Humanity, and similar charitable organizations. In this paper, we consider a world containing agents with heterogeneous abilities who may voluntarily choose to make effort contributions to one or more different public projects. Agents are motivated by a desire to be seen as significant contributors to important and valuable projects, the warm glow from the act of contributing, and a desire to directly enjoy the benefits of projects when complete. We find that contributions from others can be either strategic complements or substitutes. We show that Nash equilibria exist and study how agents' abilities and project quality affect the equilibrium levels of contributions. Copyright � 2010 Wiley Periodicals, Inc..

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Bibliographic Info

Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 12 (2010)
Issue (Month): 4 (08)
Pages: 665-689

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Handle: RePEc:bla:jpbect:v:12:y:2010:i:4:p:665-689

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Cited by:
  1. Ergin Bayrak & John Conley & Simon Wilkie, 2011. "The Economics of Cloud Computing," Vanderbilt University Department of Economics Working Papers 1118, Vanderbilt University Department of Economics.
  2. Bracha, Anat & Vesterlund, Lise, 2013. "How low can you go? Charity reporting when donations signal income and generosity," Working Papers, Federal Reserve Bank of Boston 13-11, Federal Reserve Bank of Boston.

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