Monday, 7 February 2005 | The economics of sharing. This is one subject area I've been pondering for a while: how can open-source development work, economically, and can it be applied in other areas/industries? As ever, the Economist does the thinking for you, while at the same time provoking more thought. The essence of the first part of the question is the "non-rival" nature of such goods (your use doesn't interfere with my use) and their network effect benefits (the more use, the better).

The second part is harder because there is another key to open-source sharing: the cost of distribution, which is negligible. Clearly, for physical goods there will always be a non-trivial cost component. However, there are still plenty of semi-virtual goods out there that could work, including radio frequencies, computer processing and bandwidth (eg. SETI).

Key quote in all of this: “Social sharing [represents] a third mode of organising economic production, alongside markets and the state.”

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