Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics

Abstract: This papers sheds light on the puzzling fact that even though open

source software (OSS) is a public good, it is developed for free by

highly qualified, young, motivated individuals, and evolves at a rapid

pace. We show that when OSS development is understood as the private

provision of a public good, these features emerge quite naturally.

We adapt a dynamic private-provision-of-public-goods model to reflect

key aspects of the OSS phenomenon. Apart from extrinsic motives

(namely signaling), the present model also contains intrinsic motives

of OSS programmers, such as play value or homo ludens payoff, userprogrammers’

and gift culture benefits. Such intrinsic motives feature

extensively in the wider OSS literature and contribute new insights to

the economic analysis

Keywords: open source software; public goods; homo ludens; war of attrition

JEL-codes: H41; L31; L86

27 pages, September 1, 2006

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