i’m going to defend this paper by yochai benkler in a couple hours as part of my masters. benkler argues that there is a third mode of production besides markets and hierarchies (firms): peer production. per benkler, (and my own experience makes me agree with him) peer production is the most efficient mode of production for information because it reduces the opportunity costs of production that the other 2 models entail. markets are imprecise at valuing human resources because they have limited information, and hierarchies are inefficient at assigning tasks (also due to limited information). in the peer production model, individuals voluntarily flock to the tasks that interest them most, and where they can apply their skills most gainfully. it is asserted that individuals have the best available information about their skill set, and are thus much more efficient at task selection.

the internet enables a unbounded pool of human resources to seek out problems. these economies of scale easily overcome the additional costs of integration and coordination in a highly distributed environment. with proper attribution and meritocratic structures, problems of burn-out and free riding can be overcome.

it should be an interesting discussion, especially considering that the relevant institute has been conducting research into the open source phenomenon recently.

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