Economics of Open II

“Sharing Nicely”

  1. Purpose
    1. Define “sharable goods”: physical goods that have excess capacity
      1. Sharable goods
        1. Lumpy – you have to buy a certain mount, whether you need it all or not (memory in a PC)
        2. Granularity is made up of:
          1. technical characteristics
          2. demand for functionality
          3. amount and distribution of wealth
          4. e.g. cars are mid-grained in the US, but large grained in Africa
        3. Sharing may have lower costs, improve information to act on and provide better motivation for clear excess capacity.
          1. managerial hierarchies require crisp specifications, social realtions are fuzzier.
    2. Combining comparative transactions costs and motivation analysis to suggests that this excess capacity may better be harnessed through sharing relations than through secondary markets
    3. Define conditions where it is feasible for social sharing and exchange to becoming salient
    4. Explain crossover between sharable goods and social norms, capital and common property regimes
    5. How the notion of sharable goods can inform policy.
  2. Case studies – carpooling and distributed computing
    1. Characteristics
      1. large-scale sharing among individuals who are non-existantly or weekly related
      2. sharing private economic goods
      3. there are market models through which excess capacity of these goods could be cleared
      4. output is a rival good, it could have other uses.
    2. Carpools
      1. coworkers/neighbors or dynamic, e.g. slugging
      2. highly decentralized, controlled by decisions of individual participants.
      3. a variety of reasons: using the HOV lane, the environment, company, company, teaching children to be sociable.
    3. Distributed Computing – using idle computers for small pieces of processing.
      1. for a variety of reasons – keeping computer useful, public good, recognition
  3. Lumpiness, granularity and sharable goods
    1. renewable resources – can deliver it’s functionality again and again, at different times (e.g. rechargeable batteries, soccer balls)
    2. rapidly decaying resources – the rate it decays is greater than the rate it can be consumed (e.g. sharing a bag of onions, or a car ride with empty seats)
    3. lumpiness in general – people generally buys tvs to own all the time, even though they are only used a few hours a week. The other time is slack.
    4. sharable good: conclusion
  4. Sharing and markets: transaction costs and motivations
    1. transaction costs
      1. choosing a transactional framework – cost/benefit analysis
        1. exclusion  – based on how much of a resource and how many people wnat to use it e.g. how much woodland and how many hikers
        2. perfect vs. partial exclusion. Is it easier to built a fence around your yard or to tolerate some fruit being taken from your tree.
        3. Non selective partial exclusion e.g. first come, first served (yoga recycled)
        4. selective exclusion – market selection
        5. selective exclusion – social selection: sharing your table with a friend but not a stranger
    2. general shape of transaction -costs-based chaose among frameworks
      1. when it is easier to share than to exclude people will share and vice versa
      2. if one has excess goods sharing doesn’t cost anything except the transaction.
    3. transaction costs analysis of markets and sharing
      1. crispness – necessary in the market, but not socially. Help between friends is less calculated, but doesn’t mean no obligations.
      2. rendering requirements and lossiness
      3. decentralized systems and information – trade information for control.
    4. Motivation
      1. people have intrinsic and extrinsic motivations. Extrinsic motivations “crowd out” intrinsic motivations by impairing self-determination and self-esteem. It is not acceptable to pay your friends for dinner, but it is to bring wine.
    5. Motivation and information. Should compare:
      1. transaction costs of using each system of exchange
      2. the reward flows to individuals for participating in each system
  5. Sharing as a modality of production
    1. Sharing is a common and under-appreciated modality of production e.g. free software, slashdot, making meals for neighbors, giving directions.
    2. Sharing is sensitive to tech because individual efficacy is subject to physical – capital constraints
      1. It wouldn’t make sense to use peer-production to manufacture chairs, because then everyone would need to be in the chair factory at the same time.
      2. “the relative economic role of sharing changes with technology”
    3. Decentralized, loosely coupled social sharing is an economically attractive modality of production the form of social production is fluid, which allows participants to act as they will
  6. Some current policy implications
    1. wireless communications regulation – people can share their wireless capacity, because they want to be always available, but not send messages every second.
    2. information, knowledge and cultural production policy e.g. music sharing
    3. network design for a network of sharable goods – skype allows people to share PC capacity when they aren’t using it.

Common Wisdom: Peer Production of Educational Materials

  1. Introduction
    1. “Social production based on commons, rather than property, has become a significant force in the economy”
    2. Central question: is peer production suitable for educational resources
      1. What are the limits and barriers?
      2. What strategies or innovations might facilitate development?
    3. Reasons
      1. Education everywhere
      2. Education in poorer countries
  2. Commons-based production and peer-production
    1. Commons-based: production with inputs from the commons (no one has exclusive rights) and releases outputs back to the commons
    2. Peer production: Commons based+coordination based on social-psychological motivations and signals
    3. Each requires different behaviors from participants
  3. Discrete Learning Objects and Commons-based Production
    1. an informational product that focuses the learning for the student
    2. Factors
      1. cost reduction
      2. diverse motivations
      3. easy and ubiquitous connection via the internet
    3. The problem will come not in objects but in relevance and accreditation. Models:
      1. Provide an open platform to develop, share , remix
      2. self-archiving and tagging
      3. accreditation function should be included in a platform
  4. Higher order materials: textbooks and immersive play environments
    1. Concerns
      1. quality of teachers
      2. the degree to which the institutions are willing to give freedom to teachers (especially k12)
    2. Model
      1. seems like it should similar to Wikipedia
        1. People who want to spend time an energy on making OER are a small, unique group.
        2. Range of motivations will be large
        3. community should be able to defend itself through making revisions slightly harder than reversals.
        4. But….so far haven’t been very successful e.g. Wikibooks – not many educational books, and mostly authored by one person
      2. Other issues
        1. Textbooks aren’t as modular as an encyclopedia
        2. Can a platform/engine be developed collaboratively? – yes, we have seen this happen in software.
        3. Will learning object be developed for such a platform? – yes if things are very user friendly.

Discussion Questions

  1. Can textbooks be made modularly enough to be created through peer-production? How?

The Trucker Tale – a parable of ingenuity and despair

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