The Economics of Open Source

Examples

Example one: The news

One natural example to consider would be news. Despite the democratization of news through the internet however, there is almost no need to actually create an open source “product”: After all, we can get news from everywhere, and unlike an operating system there’s no real benefit to having a single product that everyone works on.

Or is there? There are a certain number of news sources (note here, here, and here) that benefit from having open contributions to the news. The cost of sharing a story is so low that having a single product with multiple contributors can be a good thing. (For-profit news sources, already operating on an advertising model, often contribute to these news collectors.)

Example two: Recipes

A formula doesn’t change, and simple ones can be used by anyone. Furthermore, since someone can still benefit from a good recipe no matter how many people they give it to, it seems only natural that recipes would be a common thing to distribute. Indeed, there is, in fact, an open source cookbook. Of course, it could only be expected that since the culture of open source and the culture of cooking are somewhat separate, that os cookbooks might not be very thick yet. (Note: The author of this article has not tried any of the recipes in the cookbook and is not issuing a positive or negative opinion of them.)

There are also non-cooking recipes available, such as an open source formula for cola, as well as proposals for open source pharmaceutical development.

* An objection

So now that we’ve established a basic sense of how open source is used, a question comes up: how is open source different from public domain? While this article offers more detail on the subject (see page 43 of 248), we’ll simply say here that open source, unlike public domain, does restrict your use of intellectual property; however, it restricts it in a way designed to keep the intellectual property as open as when you found it (for example, you wouldn’t be able to change it, copyright it, and sell it as your own).

Sources

http://news.com.com/2010-1071-281588.html

http://sourcefrog.net/weblog/software/opensource/akpm-keynote-monopoly.html

http://opensource.mit.edu/papers/schmidtschnitzer.pdf

http://academic.reed.edu/economics/course_pages/201_f04/Cases/Microsoft/microsoft_monopoly.htm

http://en.wikipedia.org/wiki/Open_Source

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