Public provision of a private good: What is the point of the BSD license?

Software is a potentially excludable public good. It is possible, at some cost, to exclude non-paying users from its consumption by using copyright law or technological restraints. Licensing the software under proprietary license terms makes of it a private good, licensing it under the BSD does not change the economic nature of the software while licensing it under the GPL artificially makes of it a pure public good. A project leader will prefer one or the other of those license terms depending on her software project’s market potential and on the cost of developing it. The optimal licensing for a sequence of cumulative innovations and the impact of possible competition between rival software development teams are considered.Open Source Software; Public Goods; Information Goods; Non- Profit; Volunteer Organisation; Intellectual Property; Copyright; Licensing; Innovation

Software Marketing on the Internet: the Use of Samples and Repositories

This paper examines one of the most important marketing strategies by software producers on the Internet. That is whether to offer free samples and if so, whether to list the samples on shareware repositories. I show that firms with higher value products have a greater incentive to offer free samples but are more reluctant to do so if they are well known, and even when they do are less likely to be listed on shareware repositories. I then proceed to use four types of Probit-based models to corroborate the findings from the theoretical model.Shareware; Software; Internet; Distribution; Intermediation; Directory; Repository; Advertising; Brand; Reputation; Asymmetric Information; Search; Sample

The LaTeX project: A case study of open source software

The TeX typesetting software was developed by Donald E. Knuth in the late 1970s. It was released with an open source license and has become a reference in scientific publishing. TeX is now used to typeset and publish much of the world’s scientific literature in physics and mathematics. This case study serves as a critical examination of the stylized facts uncovered in previous studies of other open source software projects, such as GNU/Linux, an operating system, and Apache, a web server. It is sponsored by CNRS, a French research agency, and is supported by the University of Toulouse in France and the School of Information Management and Systems in Berkeley. The comparison centers on the historical development of the project, the organization, both formal and informal, that supports it, the motivations of the developers, and the various dynamics that are at work and influence the project. The case study explores the economic impact of the TeX software which is sold through TeX-based commercial applications and used in the typesetting industry and various institutions. It is an exploration of how the open source nature of the program made a di erence relative to what would have happened had it been commercial software.TeX, open source, Tug, software, case study, innovation, knowledge production, licenses, intellectual property, open systems

Internet Intermediaries' Editorial Content Quality

Information intermediaries deliver information about a supplier's product. They are paid by those same suppliers they certify. This introduces conflicts of interests as the intermediaries want to retain customers by delivering truthful information about suppliers, while suppliers would want the intermediary to provide them with more customers than their quality would otherwise entitle them to. The paper compares two options for information intermediaries: either propose a menu of contracts to the suppliers so that they reveal their type, or find out by themselves the type of the supplier. In the first case, a rent must be left to induce type revelation, in the other, the intermediary must incur a cost to determine the type of the supplier. The paper shows that competition leads to a more frequent use of direct revelation mechanisms at the expense of independent research by the intermediary. The paper contributes to the literature on certification intermediaries in two sided markets by introducing a choice between relying on soft information or acquiring hard information about the side of the market to be certified, and by studying the influence of competition on contract choices in such an extended setting.Search engines, two-sided markets, information services, CPM, click-through, internet, intermediation, intermediaries.

Consumer welfare and market structure in a model of competition between open source and proprietary software

I consider a Vickrey-Salop model of spatial product differentiation with quasi-linear utility functions and contrast two modes of production, the proprietary model where entrepreneurs sell software to the users, and the open source model where users participate in software development. I show that the OS model of production may be more efficient from the point of view of welfare that the proprietary model, but that an OS industry is vulnerable to entry by entrepreneurs while a proprietary industry can resist entry by OS projects. A mixed industry where OS and proprietary development methods coexist may exhibit large OS projects cohabiting with more specialized proprietary projects, and is more efficient than the proprietary model of production from the point of view of welfare.open source; proprietary; software industry; copyright; non-profit organization; mixed market; welfare; spatial product differentiation

Competition between open-source and proprietary software: the (La)TeX case study

The paper examines competition between two development models, proprietary and open-source (``OS''). It first defines and compares those two models and then analyzes the influence the development of one type of software has on the development of the other. The paper is based on the (La)TeX case study. In that case study, the features, users, and patterns in the development of the (La)TeX software were compared to its proprietary equivalents. The models that are presented in this paper describe some aspects of the strategic interactions between proprietary and open-source software. The paper shows that they cannot be analyzed independently; the decisions of one class of agents (OSS developers) are affected by those of the other class of agents (private entrepreneurs).Open source, software, proprietary software, BSD, GPL, public domain, intellectual production, licensing, patents, TeX, LaTeX

Open Source Software Development Patterns and License Terms

This paper examines the choice of license terms along the development of a piece of software. Three licenses are compared, the proprietary one, the Berkeley Software Distribution, and the General Public License. The choice of one or the other license depends on the characteristics of the software's user base, the market conditions on the developers' job market and the costs involved in maintaining a proprietary software vs. the costs involved in coordinating a software project in a decentralized fashion. That choice influences the distribution of welfare between users, developers and the software's development leader. It also determines the software's pace of development and thus the level of welfare generated. The model explains why a software's license terms may change along its development. Several scenarii may arise, depending on the initial conditions and the chance events along the life of the project. In the context of this paper, open-source license terms are chosen even when they result in a reduction in global welfare. Welfare is increased by forbidding the use of the GPL license terms and going back to the alternative between proprietary and public domain licenses.Internet, open source, software, BSD, GPL, Public domain, intellectual property, licenses, LaTeX, TeX

Open Source Licensing in Mixed Markets, or Why Open Source Software Does Not Succeed

The rivalry between developers of open source and proprietary software encourages open source developers to court users and respond to their needs. If the open source developer wants to promote her own open source standard and solutions, she may choose liberal license terms such as those of the Berkeley Software Distribution as proprietary developers will then find it easier to adopt her standard in their products. If she wants to promote the use of open source software per se, she may use more restrictive license terms such as the General Public License to discourage proprietary appropriation of her effort. I show that open source software that comes late into a market will be less likely than more innovative open source software to be compatible with proprietary software, but is also more likely to be made more accessible to inexperienced users.Open Source; Software; Standards; Compatibility; Network Effects; Duopoly; Mixed Markets; Intellectual Property; Copyright; Licensing

Shareware competition: Selling an experience

A firm may allow customers to learn the value of its product prior to buying it. This increases their willingness to pay, even though it also leads some not to buy. That strategy may also be used as a competitive tool to increase its product's attractiveness. This paper examines competition between ex-ante identical firms that sell horizontally differentiated and mutually exclusive experience goods. Customers incur set-up costs when buying a good, but those set-up costs are partly recoverable if they then decide to buy the product of a competitor. The main conclusion from this paper is that while a firm that gives information about its product makes higher profits than a competing firm that chooses not to do so, a firm may however choose that last option in order to avoid being in direct competition with a firm that is more open about the value of its product.Experience goods, Transaction costs, Technical compatibility, Mechanism competition, information goods, sampling, switching costs

The LaTeX project: A case study of open-source software

This is a case study of TeX, a typesetting software that was developed by Donald E. Knuth in the late 70's. Released with an open source license, it has become a reference in scientific publishing. TeX is now used to typeset and publish much of the world's scientific literature in physics and mathematics. This case study is part of a wider effort by academics to understand the open-source phenomenon. That development model is similar to the organization of the production of knowledge in academia; there is no set organization with a hierarchy, but free collaboration that is coordinated spontaneously and winds up generating complex products that are the property of all who can understand its functioning. The case study was led by gathering qualitative data via interviews with TeX developers and quantitative data on the TeX community -- the program's code, the software that is part of the TeX distribution, the newsgroups dedicated to the software, and many other indicators of the evolution and activity in that open-source project. The case study is aimed at economists who want to develop models to understand and analyze the open-source phenomenon. It is also geared towards policy-makers who would like to encourage or regulate open- source, and towards open-source developers who wonder what are the efficient strategies to make an open-source project successful.TeX, LaTeX, case study, open source, software, innovation, organisational structure, economic history, knowledge production, knowledge diffusion.