Hello All, Well spring has finally sprung in Cambridge, MA. It was a brutal winter! But now alas the sun is shining and the birds are chirping. Hope everyone is doing OK -- given the circumstances. We have 2 new papers and 2 updated papers on opensource.mit.edu, details below. BTW, some community stats: * We now have 83 papers on the site! * 205 researchers have signed up on our researcher directory * 225 members on the community list * 109 members on the discuss list (quiet recently!) Here are the new papers: ***************************************************** New Papers ***************************************************** Paper 1 Authors: Lee, Samuel, Nina Moisa & Marco Weiss Title: *Open Source as a Signalling Device - An Economic Analysis* http://opensource.mit.edu/papers/leemoisaweiss.pdf Abstract: Open source projects produce goods or standards that do not allow for the appropriation of private returns by those who contribute to these projects. In this paper we analyze why programmers will nevertheless invest their time and effort to code open source software. We argue that the particular way in which open source projects are managed and especially how contributions are attributed to individual agents, allows the best programmers to create a signal that more mediocre programmers cannot achieve. Through setting themselves apart they can turn this signal into monetary rewards that correspond to their superior capabilities. With this incentive they will forgo the immediate rewards they could earn in software companies producing proprietary software by restricting the access to the source code of their product. Whenever institutional arrangements are in place that enable the acquisition of such a signal and the subsequent substitution into monetary rewards, the contribution to open source projects and the resulting public good is a feasible outcome that can be explained by standard economic theory. Paper 2 Authors: Dalle, Jean- Michel & Paul A. David Title *The Allocation of Software Development Resources in 'Open Source' Production* http://opensource.mit.edu/papers/dalledavid.pdf Abstract: The paper develops a stochastic simulation model capable of describing the decentralized, micro-level decisions that allocate programming resources both within and among open source/ free software (OS/FS) projects, and which critically shape their growth. The core or behavioral kernel of our simulation tool is based on dynamic "growing" trees, and incorporates the effects of the reputational reward structure of OS/FS communities as characterized by Eric S. Raymond (1998). In this regard, our line of investigation also follows recent approaches associated with studies of academic researchers in “open science” communities. For the purposes of this first step, we mainly focus on showing the ways in which the specific norms of the reward system and organizational rules can shape emergent properties of projects, and we also point to a validation in this framework of the often adovcated, but yet mainly empirical "release early" rule. ************************************************************ Revised Papers ************************************************************ Paper 1 Author Chiao, Benjamin Hak- Fung Title: *An Economic Theory of Free and Open Source Software: A Tour from Lighthouse to Chinese-Style Socialism* http://opensource.mit.edu/papers/chiao.pdf The theory is that free and open source software is a private property under the guise of a common property. Such software is distributed under some licenses such as the GNU General Public License (GPL). The intents in The GNU Manifesto cause the GPL to have striking similarities with communism. The resulting economic properties, however, are similar to those in Chinese-style socialism: they both separate legal and economic ownerships. My departure from other analyses in the literature begins when I show that some public good properties of this type of software are observed in reality. Though non-profitable distributions are compulsory according to the provision of the GPL, the data shows that distributors have increased, for example, excludability of networks so that users are induced to buy the commercial packages. Social marginal cost is thus not zero. I refute the view that the development (including distribution) is insufficient. "Over- development" is even possible because "copylefting" allows agents to appropriate income from resource owners by establishing economic (not legal) rights over the software through informal hierarchies or trade secrets. Resource owners might not suffer. Without incentive compatibilities, the software might not be that valuable in the first place. Implications of increased substitutability of workers, absence of piracy breaking the tie-in of software and support, and branching of versions are also discussed. Paper 2 Authors: Osterloh, Margit; Sandra Rota & Bernhard Kuster Title: *Open Source Software Production: Climbing on the Shoulders of Giants* http://opensource.mit.edu/papers/osterlohrotakuster.pdf Abstract: Open source software production is a successful new production model in which a public good is voluntarily provided. We argue that by studying this new production model we gain valuable insight for organization theory beyond software production. Under specific conditions this model can be generalized, contingent on the interplay of motivational, situational, and institutional factors. It is argued that a production model building on the shoulders of predecessors and peers depends on a well balanced portfolio of intrinsic and extrinsic motivation, low costs for contributors and governance mechanisms that do not crowd out intrinsic motivation. Best, Karim -- =============================================== Karim R. Lakhani MIT Sloan School of Management MIT Free/Open Source Software Research Project e-mail: lakhani@mit.edu voice: 617-851-1224 fax: 617-344-0403 http://opensource.mit.edu http://freesoftware.mit.edu http://mit.edu/lakhani/www