Open Source Software: Free Provision of Complex Public Goods

James Bessen, Boston University School of Law and Research on Innovation

2/07/2008
(Original Publish Date: 7/1/2005)

Open source software, developed by volunteers, appears counter to the conventional wisdom that without ownership rights or government intervention, public goods will not be efficiently provided. But complexity makes a difference: contracts are incomplete and ownership rights do not necessarily elicit socially optimal effort. I consider three mechanisms that improve the provision of complex software: pre-packaging, Application Program Interfaces and Free/Open Source software (FOSS). FOSS extends the range of products available to consumers, complementing, rather than replacing, proprietary provision. Pre-packaged software addresses common uses with limited feature sets, while firms with specialized, more complex needs use FOSS.