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Reconciling Rent-Seekers and Donators – The Governance Structure of Open Source

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  • Egon Franck
  • Carola Jungwirth

Abstract

Software developed and producedin open source projects has become an importantcompetitor in the software industry. Since itcan be downloaded for free and no wages arepaid to developers, the open source endeavorseems to rest on voluntary contributions byhobbyists. In the discussion of this puzzle twobasic patterns of argumentation stand out. Inwhat we call rent-seeker approaches, emphasisis put on the fact that although no wages arepaid to contributors, other pay-offs may turntheir effort into a profitable investment. Inwhat we call donator approaches the point ismade that many people contribute to open sourceprojects without expecting to ever receive anyindividual rewards. We argue that the basic institutionalinnovation in open source has been the craftingof a governance structure, which enablesrent-seeking without crowding out donations.The focus of the presented analysis lies on thespecific institutional mechanisms, by which theopen source governance structure achieves toreconcile the interests of rent-seekers anddonators. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Egon Franck & Carola Jungwirth, 2003. "Reconciling Rent-Seekers and Donators – The Governance Structure of Open Source," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(4), pages 401-421, December.
    • Handle: RePEc:kap:jmgtgv:v:7:y:2003:i:4:p:401-421
    DOI: 10.1023/A:1026261005092
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    References listed on IDEAS

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    1. Dalle, Jean-Michel & Jullien, Nicolas, 2003. "'Libre' software: turning fads into institutions?," Research Policy, Elsevier, vol. 32(1), pages 1-11, January.
    2. Egon Franck & Carola Jungwirth, 2002. "Die Governance von Open-Source-Projekten," Working Papers 0009, University of Zurich, Institute for Strategy and Business Economics (ISU).
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    Cited by:

    1. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    2. Egon Franck, 2010. "Private Firm, Public Corporation or Member’s Association Governance Structures in European Football," International Journal of Sport Finance, Fitness Information Technology, vol. 5(2), pages 108-127, May.
    3. Serifsoy, Baris & Wei[ss], Marco, 2007. "Settling for efficiency - A framework for the European securities transaction industry," Journal of Banking & Finance, Elsevier, vol. 31(10), pages 3034-3057, October.
    4. Paul Laat, 2007. "Governance of open source software: state of the art," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 11(2), pages 165-177, May.
    5. M. Markus, 2007. "The governance of free/open source software projects: monolithic, multidimensional, or configurational?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 11(2), pages 151-163, May.
    6. Henkel, Joachim, 2006. "Selective revealing in open innovation processes: The case of embedded Linux," Research Policy, Elsevier, vol. 35(7), pages 953-969, September.

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