Today’s session is one of my favorites of the Open Source and Intellectual Property in the Digital Society course I am teaching at TU Berlin. From the summary:
“Markets, Firms and Peer Production:Markets and privately or publicly owned firms are the traditional mechanisms for the coordination of production in an economy. The coordination of production is largely influenced by transaction cost that determine what subset of the production process is coordinated within firms and which through market exchanges. Where transaction cost in markets decrease with volume for example through economies of scale, firms typically experience “diminishing returns on management” resulting in transaction cost increasing with volume. The equilibrium established by these two cutting curves is disturbed by the increasing economic importance of peer production. Peer production, the process most prominently applied to create Open Source software, extends the concepts of markets and firms by an alternative model of coordination that does not rely on price setting. To be peer-produced, goods need to present a set of attributes, like the possibility for small contributions to the overall outcome and decentralised coordination. Where the resulting transaction cost of peer production is lower than that of markets or firms, goods will tend to be produced collaboratively.
We will analyse how peer production differs from and extends markets and firms, and how it applies to software and other information goods. Self-identification as the mechanism for matching human skill to tasks is contrasted to how firms solve the same problem utilising their comparatively static supply of expertise. Finally, peer production processes will be characterised by the created content, the sorting for relevance as a quality assurance mechanism, and digital distribution.”
If you are interested in the subject and you happen to be studying in Berlin, it will be a pleasure to see you here in the coming semester. There are 30 seats only, allocated on a first-come first-served basis.