A Brief Survey of the Economics of Open Source Software

Intellectual Property and Open Source

Article Snapshot


Chaim Fershtman and Neil Gandal


The New Palgrave Dictionary of Economics, Blume, L., and S. Durlauf eds., Palgrave Macmillan, 2011


This paper reviews some key economic aspects of Open Source Software (OSS).

Policy Relevance

OSS now represents a non-trivial part of software development and follows a different development model than traditional proprietary software.

Main Points

The paper examines various topics of OSS:

  • The motivation of programmers;
  • The types of licensing employed in open source projects;
  • Recent changes in the open source model;
  • Firm participation in the open source process;
  • The institutional structure of open source;
  • Examples of open source successes and failures;
  • The Creative Commons license as an extension of open source software model to digital content.

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