OK, so Alice and Bob both value C-Money(tm) at $1,000, but Alice had to pay for it and Bob did not. If Alice "knows" that Bob wants C-Money(tm) and is willing to pay for it, and "knows" it will be released freely, her incentive would be to wait for Bob to pay for it so she can keep her $2,500 and still get the extra $1,000 utility when C-Money(tm) is released.
I'm sure everyone recognizes this as the Freeloader Effect. Alice doesn't care about the economy as a whole as much as she cares about her own net worth. What's to stop that from happening?
Incorrect answer: make Alice and Bob both pay $1,000 for C-Money(tm), or have them split the cost (i.e. Free as in freedom, not free as in beer.) Why is this incorrect? Because this does not require Carol to make her software Free-- the same scenario can easily exist with proprietary software.
Perhaps the correct answer works something like this: Alice and Bob still need to pay for C-Money(tm), but Bob wants Dave to write D-Plugin(tm) for his own needs. Dave isn't duplicating any work in this case, he's adding to the value of C-Money(tm). Just briefly thinking through this, though, I don't think the numbers add up any differently than the proprietary software case. Unless Alice and Bob split the cost instead. Hmmm... (Proof is left as an exercise for the reader...)
Lars
Michael Halcrow wrote:
(a long economics-based analysis of Free vs proprietary software)
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