Coase’s theory of the firm fails to explain why these developers would find one another and make software together, despite a lack of both formal contracts and financial compensation. In terms of transaction costs, collaborating on open source software with unaffiliated individuals should be too “expensive,” compared to writing software with one’s coworkers. But a few people noticed that these open source projects operated like communities, so they instead explained the projects’ behavior by describing them as a commons, meaning a resource that is owned, used, and managed by a community. These
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