Abstract of Master
’s Thesis Academic Year 1998The Analysis of Free Software Transactions
- A Game Theoretical Approach -
Summary
This thesis focuses on mutual cooperation that occurs in practice by software developers in the process of development and transactions involving free software, and tries to analyze their incentive structure by use of some game theoretical models
If people who are to maximize their own utility decide their actions independently, there is a possibility of arising motivation problems which results from the fact that private interests are rarely perfectly coincide with the interests of other individuals, groups to which they belong, or a whole society. Therefore, governance mechanisms that force people to behave cooperatively must be constructed. Such mechanisms have been actualized as governance by contracts and governance by membership as we classify.
However, in the free software communities on the Internet, people voluntarily contribute to development of free software. Through the case study in chapter 4 and theoretical analysis in chapter 5, we conclude that a significant feature of the freeware transactions in the internet is its coordination mechanism in the sense that even though people behave only for their own interests, it brings desirable effects to the whole community as a result. Such cooperation can been seen as being based on a
“self-enforcement mechanism” that does not need necessarily outside governance mechanisms.Moreover, we consider that there are effects of network externality in the process of development and transaction of free software.
Key Words:
1. Free Software 2. Governance Mechanism 3. Self-Enforcement
4. Coordination Game 5. Network Externality