The Economics of Free Software for a Competitive Firm

This paper builds a simple economic model of the profit seeking firm with a choice between producing an open source and proprietary solutions. Differences between public and viral licenses are discussed from the firm's perpective. Advocacy issues are omitted entirely, and the model requires no math beyond subtraction. The decision of a firm to adopt an open source product rather than purchase is also discussed, but is seen as a trivial and uninteresting problem.