B Eye: The Economics of Free Software

“Some of the most puzzling aspects of open source software–that
is, software for which there is no licensing fee charged to the
user by the creators–are those related not to the technologies but
rather to the underlying economics involved. I’ve written before
about some of the benefits that open source software offers to
users as well as developers and also about how companies can seek
and sometimes find profit from open source software as in Open
Source and the Profit Motive that addresses some of the tactical
uses of open source software. However, there is a deeper question
about open source software: How do economists account for the
creation of a good (in the economic sense of something of value)
outside the traditional framework of the firm and the
marketplace…?”

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