Motivation and Sorting in Open Source Software Innovation, by Sharon Belenzon

Why do people spend time and effort on innovative projects without direct compensation? In a recent paper with Mark Schankerman (London School of Economics), I explore this question in the context of open source software development.  In open source software (OSS), programmers are typically unpaid, and the code is available for public use and development under project-specific conditions which often make it essentially free.

But how is open source innovation sustained when its workforce doesn’t usually get paid? This question has broader applications, since we see similar situations in other areas in which “open commons” production has been proposed, including biotechnology and nanotechnology. Scholars have proposed four broad explanations: ideology, reputation, enjoyment or other personal value, and future gain.

In our paper, we observe code contributions in order to quantify how each of these motivations drives open source innovation. We exploit  the fact that there are different types of projects. Though open, unrestricted access was the original driving force behind the “free software” movement, many OSS projects now include licenses that limit terms of use. For the sake of clarity, we call these "closed" projects.

We focus on four distinct groups of developers, whose profile we infer based on the types of open source license governing the projects with which they are affiliated: open, closed, mixed, and anonymous. Open developers are developers that are associated only with projects that keep the code essentially free. On the other extreme lie the closed developers who belong only to projects that allow the commercial exploitation of the code. Mixed developers are developers that are not strongly affiliated with either open or close projects. Lastly, anonymous developers are developers that do not reveal their identity when making code contributions. The key to our approach is that we examine the pattern of contributions –what economists call the “revealed preference” of developers -- to infer their underlying incentives. That is, we try to match patterns of code contributions to each developer type, according to theoretical predictions underlying different motivations. Our results show that software developers have a variety of motivations to contribute to OSS projects:

1) Strong identification with the “ideology” underlying the open source movement. Open contributors almost exclusively contribute to projects with open licenses, indicating dedication to the ideology of the open source movement. This very important findings suggests that intrinsic, as opposed to extrinsic, motivation governs effort decisions. In other words, how much a developer identifies with the mission of the project should determine his or her level of involvement in the venture.

2) Increased reputation. Contributors from closed projects are more likely to contribute to larger and corporation-sponsored projects. This findings suggest that gaining reputation is also important for OS participation, extending support to extrinsic reasons to devote efforts to specific projects. But importantly, extrinsic type in the form of increased reputation is likely to affect more specific type of developers (closed), and may actually have no effect on others (anonymous). Importantly, we find a small effect of project size for anonymous developers (who cannot gain reputation, as they do not reveal their identity), and a negative effect of corporate sponsorship.

3) Enjoyment. For “hobbyists,” enjoyment may outweigh the effort they put in. Open contributors are much more likely to contribute to projects aimed at end users (e.g., computer games), while closed contributors target developer-oriented projects (e.g., programming tools). This suggests that open source development is more viable as a substitute for proprietary software innovation on the end-product side.

4) Future gains through reciprocity. The last theory suggests that developers may expect future gains from projects to which they have contributed. We find, however, that reciprocity plays a limited role. Developers are more likely to contribute to projects from which they have previously received contributions, and it is more common among closed developers than open developers. This suggests that reciprocity is associated more with building reputations than with intrinsic motivation.

So what does this all mean? The implication is that whether or not a project has an open source license, and the openness of the license, affects contributions to the project. For example, a more open license increases contributions by one kind of developer but reduces those of other developer types. In the context of setting license criteria, open source managers face an important trade-off: on the one hand, choosing a more closed license would mean more potential profits due to fewer commercialization restrictions. But on the other hand, the same closed license would substantially reduce contributions that come from developers that strongly identify with the open source ideology.

These findings -- that motivations are varied and induce sorting behavior -- should also be relevant beyond the OSS context. A combination of indirect and direct rewards can be more useful than just direct rewards. When indirect motivation is strong (e.g., in the academic and NGO sectors), low-powered incentives may be more effective, and direct incentives may even cancel out indirect motivation.