NBER Working Paper No. W12148; In T. Hendershott, ed., Handbook of Economics and Information Systems, pp. 285-319, Amsterdam: Elsevier
This paper reviews how open source software development works.
Open source software and traditional models each have strengths and weakness. Consumers benefit from competition between these business models.
- Traditional software (proprietary software) cannot be redistributed or changed by users and is sold for profit.
- Open source software (OSS) lets users change the code to suit their own needs; open source code under the General Public License (GPL) must be distributed free.
- The reasons developers contribute to OSS include the desire to:
Sell goods or services related to OSS.
Improve software, perhaps for one’s own needs.
Demonstrate talent, advance education or gain other nonmonetary rewards.
Keep others from dominating a field.
- OSS and proprietary software both have weaknesses. OSS is less responsive to unsophisticated users, and might not produce much relative to demand.