The economics of sharing

Although the corporate world is still baffled by the open source movement (why do these smart people invent wonderful things and then give them away?), the rest of us know that it makes sense.

That’s partly because information goods (such as software) are — like the light from Thomas Jefferson’s candle — non-rivalrous: if I give you some of my software, I don’t have less as a result. But up to now we’ve tended to assume that sharing only made sense for non-rivalrous resources. Now comes an interesting paper by Yochai Benkler arguing that sharing is emerging as a viable strategy for some rivalrous goods and services — e.g. computing power and bandwidth. The SETI@home project is one example, but there are lots of others. This also reinforces the point that P2P technology is important because it’s a tool for sharing (rivalrous) resources over the Net.

Benkler is one of those wonderful people who pours out original ideas and insights. His layer model of the Net has been very helpful in explaining IP issues to students.