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Why develop open-source software? The role of non-pecuniary benefits, monetary rewards, and open-source licence type

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  • Robert M. Sauer

Abstract

A review of the basic theory of optimal open-source software contributions points to three key factors affecting supply: non-pecuniary benefits, future expected monetary returns, and open-source licence type. This paper argues that existing large-scale software developer surveys are inadequate for measuring the relative importance of these three factors. Moreover, previous econometric studies that collect their own unique datasets generally measure the importance of only one supply factor in isolation. To fill the gap, I specify a dynamic programming model of joint labour supply and open-source contribution decisions that can provide empirical estimates of relative importance within a single unified framework.
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Suggested Citation

  • Robert M. Sauer, 2007. "Why develop open-source software? The role of non-pecuniary benefits, monetary rewards, and open-source licence type," Oxford Review of Economic Policy, Oxford University Press, vol. 23(4), pages 605-619, Winter.
  • Handle: RePEc:oup:oxford:v:23:y:2007:i:4:p:605-619
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    File URL: http://hdl.handle.net/10.1093/oxrep/grm034
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    References listed on IDEAS

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    1. Josh Lerner, 2005. "The Scope of Open Source Licensing," Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(1), pages 20-56, April.
    2. Robert M. Sauer, 1998. "Job Mobility and the Market for Lawyers," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 147-171, February.
    3. Haruvy Ernan E & Wu Fang & Chakravarty Sujoy, 2005. "Incentives for Developers’ Contributions and Product Performance Metrics in Open Source Development: An Empirical Exploration," IIMA Working Papers WP2005-03-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    4. Lerner, Josh & Tirole, Jean, 2002. "Some Simple Economics of Open," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 197-234, June.
    5. Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
    6. Henkel, Joachim, 2004. "The Jukebox Mode of Innovation - A Model of Commercial Open Source Development," CEPR Discussion Papers 4507, C.E.P.R. Discussion Papers.
    7. Keane, Michael P & Wolpin, Kenneth I, 1994. "The Solution and Estimation of Discrete Choice Dynamic Programming Models by Simulation and Interpolation: Monte Carlo Evidence," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 648-672, November.
    8. repec:reg:rpubli:168 is not listed on IDEAS
    9. Justin Pappas Johnson, 2002. "Open Source Software: Private Provision of a Public Good," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(4), pages 637-662, December.
    10. Chaim Fershtman & Neil Gandal, 2007. "Open source software: Motivation and restrictive licensing," International Economics and Economic Policy, Springer, vol. 4(2), pages 209-225, August.
    11. Harhoff, Dietmar & Henkel, Joachim & von Hippel, Eric, 2003. "Profiting from voluntary information spillovers: how users benefit by freely revealing their innovations," Research Policy, Elsevier, vol. 32(10), pages 1753-1769, December.
    12. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
    13. Stephen M. Maurer & Suzanne Scotchmer, 2006. "Open Source Software: The New Intellectual Property Paradigm," NBER Working Papers 12148, National Bureau of Economic Research, Inc.
    14. Hertel, Guido & Niedner, Sven & Herrmann, Stefanie, 2003. "Motivation of software developers in Open Source projects: an Internet-based survey of contributors to the Linux kernel," Research Policy, Elsevier, vol. 32(7), pages 1159-1177, July.
    15. Lakhani, Karim R. & von Hippel, Eric, 2003. "How open source software works: "free" user-to-user assistance," Research Policy, Elsevier, vol. 32(6), pages 923-943, June.
    16. Bonaccorsi, Andrea & Rossi, Cristina, 2003. "Why Open Source software can succeed," Research Policy, Elsevier, vol. 32(7), pages 1243-1258, July.
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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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