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Public provision of a private good: What is the point of the BSD license?

  • Alex Gaudeul

    (University of East Anglia - Norwich & ESRC Centre for Competition Policy)

Software is a potentially excludable public good. It is possible, at some cost, to exclude non-paying users from its consumption by using copyright law or technological restraints. Licensing the software under proprietary license terms makes of it a private good, licensing it under the BSD does not change the economic nature of the software while licensing it under the GPL artificially makes of it a pure public good. A project leader will prefer one or the other of those license terms depending on her software project’s market potential and on the cost of developing it. The optimal licensing for a sequence of cumulative innovations and the impact of possible competition between rival software development teams are considered.

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File URL: http://econwpa.repec.org/eps/io/papers/0511/0511002.pdf
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Paper provided by EconWPA in its series Industrial Organization with number 0511002.

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Length: 41 pages
Date of creation: 09 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwpio:0511002
Note: Type of Document - pdf; pages: 41
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Mikko Mustonen, 2005. "When Does a Firm Support Substitute Open Source Programming?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(1), pages 121-139, 03.
  2. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  3. Alexandre Gaudeul, 2004. "The LaTeX project: A case study of open-source software," Industrial Organization 0409009, EconWPA.
  4. von Krogh, Georg & Spaeth, Sebastian & Lakhani, Karim R., 2003. "Community, joining, and specialization in open source software innovation: a case study," Research Policy, Elsevier, vol. 32(7), pages 1217-1241, July.
  5. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, vol. 24(2), pages 171-193, July.
  6. 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.
  7. 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.
  8. Hellmann, Thomas F & Perotti, Enrico C, 2006. "The Circulation of Ideas: Firms Versus Markets," CEPR Discussion Papers 5469, C.E.P.R. Discussion Papers.
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