Copyleft - the economics of Linux and other open source software

An astonishing phenomenon is the rise of a large population of programmers who, seemingly against economic logic, develop and distribute software that is copylefted: freely available but licensed. Our paper suggests that the occupational choices of programmers based on reputation incentives determine the qualities of programs. A monopolist has to take into account the free software in the consumer market. When software implementation costs are low, the monopolist accepts the copyleft program in the market. We explain the simultaneous existence of commercial and copylefted programs, like Windows and Linux, and also why commercial alternatives to copyleft programs may not exist. (C) 2002 Elsevier Science B.V. All rights reserved.