Lerner, Josh and Jean Triole. "Some Simple Economics of Open Source." The Journal of Industrial Economics. Vol. 50, No. 2 (Jun., 2002), pp. 197-234. Blackwell Publishing.
This article from The Journal of Industrial Economics surveys some of the basic economics of the open source software model. The article begins by noting how open source practices have in fact existed in the realm of software development for several decades, but that the practice of open source software development has grown more concretized and widespread due to the rise of the Internet (to demonstrate this, the article provides a brief history of software development from the 70s to present day). The article then goes on to examine several case studies involving specific products of open source software development, specifically Apache, Linux, Perl and Sendmail.
Perhaps one of the more unique aspects of the article is the close examination of the motivation for developers to work with open source rather than closed source software. The authors identify several types of incentives that they hypothesize lure developers to the open source model. Such incentives include career concern incentive and the ego gratification incentive. Both of these incentives are categorized in economic terms as what's called a signalling incentive. The authors list several conditions under which signalling incentives are strengthened, and all of these conditions appear to be present within the open source model. For example, the ego gratification incentive is in part fulfilled by peer recognition. The open source model strengthens this incentive because the development process is transparent, meaning all changes to source codes are tracked and tied to specific developers, thus allowing for a high level of peer recognition.
While this article may ultimately pose more questions than it answers, it marks a necessary step towards closer examination of the open source model. By examining the model from an economic perspective, the article is helping to systematize and deconstruct the motivations and human behaviors that govern the ways in which open source development operates.