The Magic Cauldron

This essay analyzes the evolving economic substrate of the open-source phenomenon. The author first explodes some prevalent myths about the funding of program development and the price structure of software. The author then present a game-theory analysis of the stability of open-source cooperation. He presents nine models for sustainable funding of open-source development; two non-profit, seven for-profit. He then continues to develop a qualitative theory of when it is economically rational for software to be closed. He then examines some novel additional mechanisms the market is now inventing to fund for-profit open-source development, including the reinvention of the patronage system and task markets. He concludes with some tentative predictions of the future.

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