SharingEconomy

What is the Sharing Economy

A Business 2.0 article did a very good job describing Creative Commons and the "sharing economy" which they believe is a multi-billion dollar industry. As I approach companies about trying to adopt creative commons, free software or investment in basic research and innovation, I am struck by the lack of understanding of the value of sharing and contributing from to the commons. It makes a lot of sense to me, but I wonder if it might be useful to try to collect material and generate some addition material that describes the benefits of sharing from a business and economics perspective.

Lawrence Lessig describes the argument very well in Free Culture, but I think that a rigorous business treatment would help the business guys a lot. The think the argument can be made that open protocols such as TCP/IP and http have enabled a great deal of business to happen and if either had been "owned" or patented, we would not have the Internet today. I'm sure IBM can make a strong case about the value of Linux which it has embraced so wholeheartedly. I recently met business researchers in St. Gallen who were displacing management consultants by allowing companies to participate in academics studies about their management that would be contributed to open research. I think there are many arguments about contributing to the commons and how the commons creates a foundation upon which we can build. -- JoiIto

Types of Sharing

• Free Software

• Linux

• Apache

• Languages

• Python

• Perl

• Protocols

• TCP/IP

• World Wide Web

• Content Sharing

• Creative Commons

• Basic Research

Theory

Asking the value of a work in the commons is hard to answer. It makes more sense to ask the value of the service of creating a certain work that does not already exist. We might imagine a consortium of all interested users of the work, and ask them what they would collectively pay for the work to be created. We can also ask a potential producer of a work the amount of money they would ask in order to produce it, an amount that may depend on competing bids for the producer's time and effort.

Various protocols have been developed along these lines:

• The Street Performer Protocol - an artist announces that they will only produce/release a work once a certain amount of money has been raised. Various web sites have used something like this successfully, by announcing that the web site will only continue to exist if a certain amount of money is raised.

• The Wall-Street Performer Protocol - bounties are placed on the creation of specific works, based on a kind of bond market. Prizes awarded for the creation of specific open source software are an example of this.

• The Rational Street Performer Protocol - the value of a work may vary based on the amount of money raised for its creation (a better job can be done with more money). Potential users of a work therefore offer "conditional donations": they agree to pay an amount that is a function of the total amount raised. The largest total amount that may be raised consistent with the terms of each conditional donation is found.

References

• Articles and papers about Content Sharing

• Business 2.0 Sharing Economy

• Harvard UNC study on lack of impact of filesharing on music business

• NYT - A Heretical View of File Sharing

• Music Industry: Stop Shirking - only partly related, but an interesting view on the dynamics of sharing

• Sharing and Stealing

• How to Determine the Business You're REALLY In - Several examples throughout this paper presented at Univ of Toronto's Rotman School of Management

• The Success of Open Source by Steven Weber

• Yochai Benkler's paper, "Coase's Penguin: Or Linux and the Nature of the Firm"

• The Battle for the Commons

• Cory - DRM Bad

• Commonspace: Beyond Virtual Community