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Contracts and Motivations. The Case of Open Source

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Author Info
Marcello Basili ()
Antonio Nicita ()
Maria Alessandra Rossi ()

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Abstract

The literature on Open Source phenomenon has revealed the crucial role played by both intrinsic and extrinsic motivations. However an analysis attempting to formally explore this interplay is still missing. In this paper, we try to fill the gap by introducing intrinsic motivations in standard principal-agent model, focusing on the case of Open Source Software (OSS). We show that, if developers’ intrinsic motivation is sufficiently high, paying developers to work on OSS projects allows the firm to induce a desired level of workers’ effort at a lower cost compared to the standard case of monetary incentives and sanctions coupled with costly monitoring.

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 544.

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Date of creation: Oct 2008
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Handle: RePEc:usi:wpaper:544

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Related research
Keywords: extrinsic and intrisic motivations; agency contracts; open-source software; open-source software developers;

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Find related papers by JEL classification:
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Stephen M. Maurer & Suzanne Scotchmer, 2006. "Open Source Software: The New Intellectual Property Paradigm," NBER Working Papers 12148, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Roland Benabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Blackwell Publishing, vol. 70(3), pages 489-520, 07. [Downloadable!] (restricted)
  3. Marcello Basili & Maurizio Franzini, 2007. "Cooperation, reciprocity and self-esteem: A theoretical approach," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 007, Department of Economic Policy, Finance and Development (DEPFID), University of Siena. [Downloadable!]
  4. Bitzer, Jurgen & Schrettl, Wolfram & Schroder, Philipp J.H., 2007. "Intrinsic motivation in open source software development," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 160-169, March. [Downloadable!] (restricted)
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