The Magic Cauldron
by Eric S. RaymondJune 1999
This paper analyzes the evolving economic substrate of the
open-source phenomenon. We first explode some prevalent myths
about the funding of program development and the price structure
of software. We present a game-theory analysis of the stability of
open-source cooperation. We present eight models for sustainable
funding of open-source development; two non-profit, six for-profit.
We continue to develop a qualitative theory of when it is economically rational to be closed. We then examine 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. We conclude with some tentative predictions
of the future.