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Harvesting Altruism in Open-Source Software Development

Author

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  • E. Haruvy

    (University of Texas at Dallas)

  • A. Prasad

    (University of Texas at Dallas)

  • S.P. Sethi

    (University of Texas at Dallas)

Abstract

Firms have the choice of developing software as either open source or closed source. The open-source approach to software development has been advocated as a new and better method for developing high quality software than the traditional closed-source approach. In open source, volunteer programmers freely contribute code to develop and improve the software. This paper describes the key nonpecuniary motivations for these programmers. They are less motivated to contribute if they observe commercial marketing of the open-source software they helped create, leading to a reduction in improvements to the software. A primary concern for software firms seeking to develop and market open-source software is, thus, how the motivation of contributors should be managed. We examine optimal pricing strategies for open-source and closed-source software keeping in mind the distinct motivations of programmers in the two cases. We compare profits and software qualities from the two approaches and provide implications for firms in the software industry.

Suggested Citation

  • E. Haruvy & A. Prasad & S.P. Sethi, 2003. "Harvesting Altruism in Open-Source Software Development," Journal of Optimization Theory and Applications, Springer, vol. 118(2), pages 381-416, August.
    • Handle: RePEc:spr:joptap:v:118:y:2003:i:2:d:10.1023_a:1025455523489
    DOI: 10.1023/A:1025455523489
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    Cited by:

    1. Suhada, Thontowi A. & Ford, Jerad A. & Verreynne, Martie-Louise & Indulska, Marta, 2021. "Motivating individuals to contribute to firms’ non-pecuniary open innovation goals," Technovation, Elsevier, vol. 102(C).
    2. Caulkins, Jonathan P. & Feichtinger, Gustav & Grass, Dieter & Hartl, Richard F. & Kort, Peter M. & Seidl, Andrea, 2013. "When to make proprietary software open source," Journal of Economic Dynamics and Control, Elsevier, vol. 37(6), pages 1182-1194.
    3. Mann, Stefan & Wüstemann, Henry, 2012. "The fading scope of labour – remarks about the lost rationale of a common term," MPRA Paper 39401, University Library of Munich, Germany.
    4. Krishnamurthy, Sandeep & Ou, Shaosong & Tripathi, Arvind K., 2014. "Acceptance of monetary rewards in open source software development," Research Policy, Elsevier, vol. 43(4), pages 632-644.
    5. Haruvy Ernan E & Wu Fang & Chakravarty Sujoy, 2005. "Incentives for Developers’ Contributions and Product Performance Metrics in Open Source Development: An Empirical Exploration," IIMA Working Papers WP2005-03-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    6. Waring, Teresa & Maddocks, Philip, 2005. "Open Source Software implementation in the UK public sector: Evidence from the field and implications for the future," International Journal of Information Management, Elsevier, vol. 25(5), pages 411-428.
    7. Holck, Jesper & Larsen, Michael Holm & Pedersen, Mogens Kühn, 2004. "Identifying Business Barriers and Enablers for the Adoption of Open Source Software," Working Papers 2004-10, Copenhagen Business School, Department of Informatics.

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