For anyone interested, here is a direct link[1] to the scientific background to Tirole's 'Market Power and Regulation' ideas, which were kindly compiled by the committee. Open source is first mentioned on page 27 (out of 54).<p>[1]: <a href="http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2014/advanced-economicsciences2014.pdf" rel="nofollow">http://www.nobelprize.org/nobel_prizes/economic-sciences/lau...</a><p>From the paper:<p>Open-source software: The literature on patent races assumes that R&D
investments are driven by the traditional profit-motive. However, economists
are increasingly realizing that not all new technologies originate in this way.
An important example is Open Source Software (OSS), where programmers at many
different locations and organizations share code to develop new software. This
process was important in the development of the Internet, contributing such
software as TCP/IP, BIND, Perl, Sendmail, Linux, Mozilla and Apache. What
initially baffled economists was that OSS developers did not seem to benefit
financially from their efforts. OSS is, in effect, a public good, which raises
the question why OSS programmers contribute voluntarily, without pay, to the
public good. Lerner and Tirole (2002) argued that economic theory may, in
fact, be able to answer this question. Their main hypothesis is that software
developers have career concerns. Contributing to the OSS may be a credible
signal of one's programming ability, which may lead to job offers, shares in
commercial open source-based companies, or access to the venture-capital
market.35 Drawing on a previous literature on career concerns (e.g., Holmstrom,
1982), they argue that the signaling motive is stronger the more visible is
performance, the higher the impact of effort on performance, and the more
informative performance is about talent. They find support for the signaling
motive in four case studies (Apache, Linux, Perl and Sendmail). Subsequent
research also found support for Lerner and Tirole's (2002) signaling theory, at
least for some OSS projects (e.g., Hann, Roberts and Slaughter, 2013, for
Apache). However, programmers seem to contribute to OSS for a variety of
reasons, perhaps including altruism. A satisfactory explanation of OSS
development may require a mixture of signaling theory and insights, like those
of 2009 Economics Laureate Elinor Ostrom, into how cooperative behavior can be
supported by norms and other social mechanisms (O'Mahony, 2003).