International Economics and Economic Policy

, Volume 4, Issue 2, pp 209–225 | Cite as

Open source software: Motivation and restrictive licensing

  • Chaim FershtmanEmail author
  • Neil Gandal
Original Paper


Open source software (OSS) is an economic paradox. Development of open source software is often done by unpaid volunteers and the “source code” is typically freely available. Surveys suggest that status, signaling, and intrinsic motivations play an important role in inducing developers to invest effort. Contribution to an OSS project is rewarded by adding one’s name to the list of contributors which is publicly observable. Such incentives imply that programmers may have little incentive to contribute beyond the threshold level required for being listed as a contributor. Using a unique data set we empirically examine this hypothesis. We find that the output per contributor in open source projects is much higher when licenses are less restrictive and more commercially oriented. These results indeed suggest a status, signaling, or intrinsic motivation for participation in OSS projects with restrictive licenses.


Open source software Intrinsic motivation Professional status Signaling Restrictive licenses 

JEL Classification

D20 L86 



We are grateful to an anonymous referee, the editors, Guenter Knieps and Ingo Vogelsang, and to Judith Chevalier, David Evans, Bernard Reddy, David Steinberg, Manuel Trajtenberg, and seminars participants at the 2004 AEA meetings and Tel Aviv University for helpful comments. Financial support from NERA is gratefully acknowledged.


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Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  1. 1.Department of EconomicsTel Aviv University and CEPRTel AvivIsrael
  2. 2.Department of Public PolicyTel Aviv University and CEPRTel AvivIsrael

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