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The Magic Cauldron

This paper analyzes the economics of open-source software. It includes some explosion of common myths about software production economics, a game-theoretical account of why open-source cooperation is stable, and a taxonomy of open-source business models.

This is the third of three papers I have written on the ecology of open-source software. The first was The Cathedral and the Bazaar. The second was Homesteading the Noosphere. All these papers are now available hardbound as a book, titled "The Cathedral and the Bazaar", from O'Reilly Associates.

Here's the HTML. You can also download the original SGML. You can also download flat ASCII, Postscript, or a Pilot Doc version.

CatB Book Cover This paper is not `finished', and may never be. Publishing a theory should not be the end of one's conversation with the universe, but the beginning. I welcome feedback, suggestions, and corrections and will incorporate them into the paper. A change log is included at the end of the paper.

If you like these papers, you will probably also enjoy my How To Become A Hacker FAQ (also in the book).


Sebastien Blondeel <> is working on a translation of this paper.

Diego Rodrigo has done a Spanish translation

. There is a Japanese translation by YAMAGATA Hiroo, the same person who did the excellent Japanese translation of CatB.

There is a German translation by Reinhard Gantar.


24 Jun 1999, version 1.5 -- first public release.

24 Jun 1999, version 1.9 -- `future-proofing', the `Free the Future' model, and a new section on exclusion payoffs.

24 Jun 1999, version 1.10 -- better name for the `Razor Blades' model.

25 Jun 1999, version 1.13 -- corrected 13% claim about Netscape revenues; added better treatment of free-rider effects, corrected list of closed protocols.

25 Jun 1999, version 1.14 -- added e-smith, inc.

9 Jul 1999, version 1.15 -- new appendix on hardware drivers, and a better explanation of rivalrous goods due to Rich Morin.

8 Aug 1999, version 1.16 -- new section, ``Future-Proofing, Market Pressures, and Strategic Business Risk''.

22 Oct 1999, version 1.17 -- This version went into the book.

Back to Eric's Home Page Up to Site Map $Date: 1999/11/06 15:50:51 $

Eric S. Raymond <>