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The Simple Economics of Open Source


  • Josh Lerner
  • Jean Triole


There has been a recent surge of interest in open source software development, which involves developers at many different locations and organizations sharing code to develop and refine programs. To an economist, the behavior of individual programmers and commercial companies engaged in open source projects is initially startling. This paper makes a preliminary exploration of the economics of open source software. We highlight the extent to which labor economics, especially the literature on career concerns,' can explain many of these projects' features. Aspects of the future of open source development process, however, remain somewhat difficult to predict with off-the-shelf' economic models.

Suggested Citation

  • Josh Lerner & Jean Triole, 2000. "The Simple Economics of Open Source," NBER Working Papers 7600, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7600
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    References listed on IDEAS

    1. Hermalin, Benjamin E, 1998. "Toward an Economic Theory of Leadership: Leading by Example," American Economic Review, American Economic Association, vol. 88(5), pages 1188-1206, December.
    2. Bengt Holmström, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 169-182.
    3. Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc.
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    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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