The Simple Economics of Open Source

Josh Lerner, Jean Triole

NBER Working Paper No. 7600
Issued in March 2000
NBER Program(s):The Productivity, Innovation, and Entrepreneurship Program

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.

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Document Object Identifier (DOI): 10.3386/w7600

Published: "Some Simple Economics of Open Source," Journal of Industrial Economics, 52 (June 2002) 197-234.

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