Linking projects and markets
Stefan Kooths, Markus Langenfurth, and Nadine Kalwey wrote, (PDF) "Without a price signal, it remains unclear whether development time spent in Project A would create greater utility if spent in Project B. The traditional economic view of software, in which it is a nonrival good among users, therefore only applies to existing software, that is, from an (economically less interesting) ex post perspective. However, whenever the issue is about using scarce resources for the production of new software, competition among potential future users definitely exists if they are faced with the choice of having to do without the new Software A so that the alternative Software B can be programmed, or vice versa (ex ante rivalry). Markets can easily solve this conflict through the price mechanism, while other coordination processes fail in this aspect as they are unable to valuate and consequently compare A and B due to the lack of pricing."
Signal is a good thing. Direct participation by users in peer production is one way to get it, a software deficiency market might turn out to be another, and Seth Schoen pointed me to The private provision of public goods via dominant assurance contracts by Alexander Tabarrok. See also Assurance contract on Wikipedia.
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Don Marti
<dmarti@zgp.org>
