I'm gathering resources on this question. Here are some annotated links. Please get in touch if you are studying and want to share ideas on this topic.
General Counsel, Free Software Foundation
Founder, Software Freedom Law Center
Great resources available from his site.
Coase's Penguin, or, Linux and The Nature of the Firm (pdf) by Yochai Benkler
For decades our common understanding of the organization of economic production has been that individuals order their productive activities in one of two ways: either as employees in firms, following the directions of managers, or as individuals in markets, following price signals. This dichotomy was first identified in the early work of Ronald Coase and was developed most explicitly in the work of institutional economist Oliver Williamson. In this paper I explain why we are beginning to see the emergence of a new, third mode of production, in the digitally networked environment, a mode I call commons-based peer production.
The Magic Cauldron by Eric Raymond
This essay analyzes the evolving economic substrate of the open-source phenomenon. I first explode some prevalent myths about the funding of program development and the price structure of software. I then present a game-theory analysis of the stability of open-source cooperation. I present nine models for sustainable funding of open-source development; two non-profit, seven for-profit. I then continue to develop a qualitative theory of when it is economically rational for software to be closed. I then examine some novel additional mechanisms the market is now inventing to fund for-profit open-source development, including the reinvention of the patronage system and task markets. I conclude with some tentative predictions of the future.
The Scientific Flask - critique of The Magic Cauldron by Fare Rideau
Open Source as a Signalling Device - An Economic Analysis
We argue that the particular way in which open source projects are managed and especially how contributions are attributed to individual agents, allows the best programmers to create a signal that more mediocre programmers cannot achieve. Through setting themselves apart they can turn this signal into monetary rewards that correspond to their superior capabilities.
Ross Anderson has published extensively on the economics of information security (not sure how relevant)
In this blog post, Stuck in the 20th Century, Lawrence Lessig (one of the initiators of the Creative Commons licenses) describes himself as a communalist when accused of being a communist: "So Nick Carr charges me with launching the Cultural Revolution, in a post dripping with references to the evils of communism ..."
Lessig goes onto recommends these three (really four) books for those who "really don’t see that there are different economies":
The Wealth of Networks: How Social Production Transforms Markets and Freedom by Yochai Benkler
In Benkler's view, the new "networked information economy" allows individuals and groups to be more productive than profit-seeking ventures. New types of collaboration, such as Wikipedia or SETI@Home, "offer defined improvements in autonomy, democratic discourse, cultural creation, and justice"-as long as government regulation aimed at protecting old-school information monoliths (such as the Digital Millennium Copyright Act) doesn't succeed. Non-market innovation is a good thing in itself and doesn't even have to threaten entrenched interests, Benkler argues; rather, "social production" can use resources that the industrial information economy leaves behind
The Success of Open Source by Steven Weber
Ever since the invention of agriculture, human beings have had only three social-engineering tools for organizing any large-scale division of labor: markets (and the carrots of material benefits they offer), hierarchies (and the sticks of punishment they impose), and charisma (and the promises of rapture they offer). Now there is the possibility of a fourth mode of effective social organization--one that we perhaps see in embryo in the creation and maintenance of open-source software.
Democratising Innovation by Eric von Hippel
Von Hippel argues that manufacturers should redesign their innovation processes and that they should systematically seek out innovations developed by users. He points to businesses -- the custom semiconductor industry is one example -- that have learned to assist user-innovators by providing them with toolkits for developing new products. User innovation has a positive impact on social welfare, and von Hippel proposes that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it. The goal of a democratized user-centered innovation system, says von Hippel, is well worth striving for
The Long Tail: Why the Future of Business is Selling Less of More by Chris Anderson
Smash hits have existed largely because of scarcity: with a finite number of bookstore shelves and theaters and Wal-Mart CD racks, "it's only sensible to fill them with the titles that will sell best." Today, Web sites and online retailers offer seemingly infinite inventory, and the result is the "shattering of the mainstream into a zillion different cultural shards." These "countless niches" are market opportunities for those who cast a wide net and de-emphasize the search for blockbusters
The TSA's Selective Laptop Ban - Last Monday, the TSA announced a peculiar new security measure to take effect within 96 hours. Passengers flying into the US on foreign airlines from eight...
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