Economics Of Open Source

Two fairly old papers on the economics of open source. The news recently has been that open source allows companies to bring in better, more innovative talent and saves marketing costs, but these papers are interesting nonetheless.

The Simple Economics of Open Source:

The nexus of open source development appears to have shifted to Europe over the last ten years. This paper explains why this trend undermines cultural arguments about “hacker ethics” and “post-scarcity” gift economies. It suggests that classical economic theory offers a more succinct explanation for the peculiar international distribution of open source development: hacking rises and falls inversely to its opportunity cost. This finding throws doubt on the Schumpeterian assumption that the efficiency of industrial systems can be measured without reference to the social institutions that bind them.

The Fading Altruism of Open Source Development:

The nexus of open source development appears to have shifted to Europe over the last ten years. This paper explains why this trend undermines cultural arguments about “hacker ethics” and “post-scarcity” gift economies. It suggests that classical economic theory offers a more succinct explanation for the peculiar international distribution of open source development: hacking rises and falls inversely to its opportunity cost. This finding throws doubt on the Schumpeterian assumption that the efficiency of industrial systems can be measured without reference to the social institutions that bind them.

economics, free software, open source, oss, peer reviewed