Open Source Software or Free Software appears contrary to conventional wisdom about intellectual property--free products challenge commercially-developed products in quality and market share. This talk explores the economics of Open Source, arguing that software complexity explains this result and overturns conventional thinking on property rights. Paper abstract: Open source software, developed by volunteers, appears counter to conventional wisdom about private provision of public goods. Standard theory holds that without property rights (or excludability), free-riding inhibits private investment in non-rival goods such as information and software. But complex open source products challenge commercially-developed software in quality and market share. I argue that the complexity of software changes the results. For complex goods under asymmetric information, open source developers self-select, offsetting free-riding losses. But commercial firms lack information necessary for
effective provision. I compare different forms of provision and different property rights. Strong property rights can limit provision of complex public goods.
