Public Provision of a Private Good: What is the Point of the BSD License?

27 Pages Posted: 1 Oct 2006 Last revised: 14 May 2014

See all articles by Alexia Gaudeul

Alexia Gaudeul

Georg-August-Universität Göttingen

Date Written: July 25, 2005


Software is a potentially excludable public good. It is possible, at some cost, to exclude non-paying users from its consumption by using copyright law or technological restraints. Licensing the software under proprietary license terms makes of it a private good, licensing it under the BSD does not change the economic nature of the software while licensing it under the GPL artificially makes of it a pure public good. A project leader will prefer one or the other of those license terms depending on her software project's market potential and on the cost of developing it. The optimal licensing for a sequence of cumulative innovations and the impact of possible competition between rival software development teams are considered.

Keywords: Open Source Software, Public Goods, Information Goods, Non-Profit, Volunteer Organisation, Intellectual Property, Copyright, Licensing, Innovation

JEL Classification: D23, D45, D71, D86, H41, H42, K11, L31, L86, O31

Suggested Citation

Gaudeul, Alexia, Public Provision of a Private Good: What is the Point of the BSD License? (July 25, 2005). Available at SSRN: or

Alexia Gaudeul (Contact Author)

Georg-August-Universität Göttingen ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
+49 (0) 551 39 7333 (Phone)


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