New Economy

Created: 2000-04-26
Last Modified: 2000-5-04
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New Economy Forum Briefing

J. Bradford DeLong
http://www.j-bradford-delong.net/
delong@econ.berkeley.edu

May 2000

 


Open Source

  • There has been a recent surge of interest in open source software development, which involves developers at many different locations and organizations sharing code to develop and refine programs for free.
  • To an economist, the behavior of individual programmers and commercial companies engaged in open source projects is initially startling.
  • Understanding the rise of open source requires two lines of investigation:
    • What factors have suddenly reduced the costs of undertaking and coordinating an open-source project?
    • What factors have suddenly raised the benefits of participating in an open-source project?
  • The costs have been reduced by the internet.
  • The benefits have been raised...
    • ...by the internet.
    • ...by the fact that two heads are better than one when debugging is in progress.
    • ...by the need for software engineers to build reputation among their peers in order to advance their careers.
  • Nevertheless, there is little doubt that open-source development is a genuinely new phenomenon
    • Gift-exchange organization is traditionally hard to support because free-riding tends to diminish effort below the level at which the organization can function.
    • But now the ability to draw small amounts of effort from a very large number of people makes gift-exchange modes of organization surprisingly viable.


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Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
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