Giving It Away for Free? The Nature of Job-Market Signaling by Open-Source Software Developers

Wafa Orman

The B.E. Journal of Economic Analysis & Policy, 2008, vol. 8, issue 1, 1-33

Abstract: Much work has been done in recent times to answer the question of why people contribute, and continue to contribute to open-source and free software, despite the lack of immediate financial gain in most cases. Lerner and Tirole (2002) hypothesize that open-source contributions act as a form of job-market signaling - they permit prospective employers to judge a person's ability directly. This paper tests the nature of this signaling using a complementarity framework. Do developers use open source software as a way to enhance the signal from a college education, or to substitute for it, in a form of learning by doing? I find evidence that they are complements, while conclusively rejecting the idea that they are substitutes.

Date: 2008
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DOI: 10.2202/1935-1682.1875

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