Are the economics of open source so simple?
In their oft-cited paper “Some Simple Economics of Open Source” (2002), Josh Lerner and Jean Tirole make the case that standard economic incentives, such as reputational concerns, can explain the behavior of those that freely contribute to open source projects. They don’t take seriously the idea that altruism might play a major role:
Why should thousands of top-notch programmers contribute freely to the provision of a public good? Any explanation based on altruism only goes so far. While users in less developed countries undoubtedly benefit from access to free software, many beneficiaries are well-to-do individuals or Fortune 500 companies. Futhermore, altruism has not played a major role in other industries, so it would have to be explained why individuals in the software industry are more altruistic in others.
I don’t agree that such explanation is necessary. It might be the case that hackers are no more altruistic than other people, but altruistic hackers have a better chance than, say, altruistic auto manufacturers. If Henry Ford had not been interested in turning a profit, he would have had trouble raising funds, and GM would have quickly overwhelmed his company. But Linus Torvalds had little to lose if Linux didn’t work out. Moreover, Torvalds’ selflessness may have given his collaborators confidence that their contributions would not be in vain.
Altruism is a competitive disadvantage in most industries but might be just the opposite in the software industry. Thus, altruism may play a more important role in OSS development than in other industries not because hackers are more altruistic, but because altruistic hackers are more successful.
Jamie said:
Jun 30, 08 at 9:46 amI’m not sure if altruism is quite the right word, at least if altruism means “desire to give charity,” as the quoted paragraph seems to mean.
The open source hackers I know are motivated largely by perfectionism, a feeling that a world in which the best possible software is not available free is just, I don’t know, inelegant.
It’s not an altruistic desire to alleviate the suffering of particular people, in fact most open source projects, especially early ones, seem to be incredibly ineffective to this end. If Linus wanted to help staving children in Africa, Linux seems like a poor choice for his energies. One-laptop-per-child is a notable exception. It could well be argued that Bill Gates has been far more effectively altruistic in his support of health in the developing world than any open source author.
It’s my understanding that the motivation for Linux was far more academic. The thing Linus didn’t like about Windows wasn’t that it was harming people financially, it was that bugs in Windows (of which there are plenty) couldn’t be fixed efficiently by the computer science community. His goal with Linux, as I understand it, and I think this is true of many open source hackers, was to produce an OS that would achieve a higher standard of quality. He chose the non-proprietary route because it works the same way as the academic world in general, academics the world over are free to build on any previous work in their field. This is obviously the most efficient and elegant way to make new math, and mathematicians (of which hackers are a subset) hate inelegance and inefficiency. If they didn’t, they’d be social scientists
In short, I’d say aesthetic concerns like “perfectionism” or “elegance” are the primary non-standard-economic motivations of the open-source community.
Jamie said:
Jun 30, 08 at 9:57 amFurther, it occurs to me that the motivations of open-source developers would make for a possibly fruitful research topic.