team teach 8 slides rough
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Teaching Team 8
Ketaki
Mackenzie
Sean
Tommy
Economics Background
Yochai Benkler’s
“The New Open Source Economics” (video)“Coase’s Penguin, or Linux and the Nature of the Firm”
market
http://economics.blog.co.in/files/2008/03/equilibirium.JPGhttp://www.unesco-ihe.org/var/ihe/storage/images/media/images/skyscraper/20844-1-eng-GB/skyscraper_reference.jpg
firm / government
Original Transactional Frameworks
falling barriers to entry
http://economics.blog.co.in/files/2008/03/equilibirium.JPGhttp://www.unesco-ihe.org/var/ihe/storage/images/media/images/skyscraper/20844-1-eng-GB/skyscraper_reference.jpghttp://communities-dominate.blogs.com/photos/uncategorized/2007/10/28/p2pgovernance_id3929961_size480.jpg
firm / government commons basedproduction
market
How do you choose? transaction costs
market-based non-market-based
decentralized price system X(we are here)
centralized firm hierarchy government; non-profits
Benkler’s Four Transactional Frameworks
“social sharing and exchange”
commons based peer productionopen sourceX
Table from Benkler video
social production
commons based peer production
http://www.fao.org/docrep/003/X7579E/x7579e05.gifhttp://www.we-make-money-not-art.com/wow/0aasocialatatg.jpg
“What this means is that for the first timesince the Industrial Revolution, the mostimportant means, the most importantcomponents of the core economic activities … of the most advanced countries … are inthe hands of the population at large.”
- Benkler (video)
Three economic questions:
1) Why do people do it?
2) How does it work?
3) How good are the results?
Why do people do it?
benefits: social-psychological and reputation
new motivational structure
vs
http://upload.wikimedia.org/wikipedia/commons/3/32/Prisoners_dilemma.pnghttp://www.imagechef.com/ic/make.jsp?tid=Sticky+Note
How does it work?
new capabilities of communication tools
information is a public good
increasing returns to scale
http://www.flightsafrica.co.uk/blog_images/beach3.jpghttp://content.answers.com/main/content/img/investopedia/diseconomiesofscale.gif
How good are the results?
solves principal-agent problem
“practically all successful peer production systems havea robust mechanism for peer review or statisticalweeding out of contributions from agents who misjudgethemselves”
Dewey vs Lippmann