Subject: Re: Hal's new white paper - Free Software/Public Sector
From: Taran Rampersad <cnd@knowprose.com>
Date: Mon, 22 Mar 2004 22:45:52 -0500

David N. Welton wrote:

>http://opensource.mit.edu/papers/cominomanenti.pdf
>
>
>        We assume for simplicity that the population of consumers is
>        of mass 1: a portion are the uninformed and the remaining 1 -
>        are the informed ones. Irrespectively on their type, consumers
>        are uniformly distributed on a unit length segment. A consumer
>        located at x [0, 1] gets a net utility from buying the closed
>        source software of
>
>                                Uc = v - tx - p,
>
>        where v is the gross utility from adopting the software, t is
>        a transportation cost and p is the price charged by the CSS
>        producer. t may be interpreted in many ways: the cost of
>        learning how to use the software, the installation cost or the
>        cost of adapting other software applications.  Similarly, the
>        consumer's net utility from adopting OSS is
>
>                               Uo = v - t(1 - x).
>
>Why should free software necessarily be the inverse of the proprietary
>software?
>
I'm no economist, but there's a 'p' missing somewhere. I'll have to read 
the paper sometime this week and see if the flaw I think is in there is 
(or, perhaps someone can correct me). If the 'price charged by the CSS 
Producer' is neglected in the equation for the consumer's net utility is 
indicative of the rest of the paper, it would indicate that the writer 
of the paper thinks people write software at no cost - which might 
explain Microsoft's 'Total Cost of Ownership' FUD last year...

I reserve the right to be blatantly wrong at all times, but at a glance 
it's a bit disturbing because the poorly defined 't' would probably 
include 'p' in the OSS equation, which simply hides 'p'. It doesn't 
necessarily change the value of 'p'.

Dang it, something ELSE to read...

-- 
Taran Rampersad
cnd@knowprose.com
http://www.knowprose.com
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