Intrinsic Motivation versus Signaling in OpenSource Software Development

Jurgen Bitzer, Free University Berlin, Wolfram Schrettl, Free University Berlin, and Philipp J.H. Schroder, Aarhus School of Business

2/07/2008
(Original Publish Date: 9/1/2006)

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.