Open Source Economics

OK, so a lot has been said about this, but I am not convinced that anyone has really explained the economics of open source software development. 

For those not familiar here is a TED presentation on the subject -

http://www.ted.com/talks/yochai_benkler_on_the_new_open_source_economics.html

Basically communities of interest come together and develop software that is free to use.  So where is the economic rationale?  I have read some who discount the "prestige" factor that developers get recognition from peers.  Others argue that the "value" is in terms of getting software that doesn't currently exist, but this doesn't address the origins of open-source programs that are at best marginally useful when published.

What I think is shown by this movement is that simple economic "value" arguments are not of significant utility when we get into more emergent phenomena like open-source or even things like LibraryThing or other such socially constructed sites.

Comments

[Adrienne]

I think this is a perfect illustration against economic determinism and for the concept of industry norms and arguably values. And yes, there may eventually be economic rewards but I believe, especially in the programmer/programming community peer recognition and prestige IS the incentive. This semester I am taking an American Economic History course, where EVERY action/idea/thought is quantified. I listened in amazement as the professor quantified Durkheim's (without acknowledging Durkheim)theory of collective action and anomie. (He used reputation game theory - I think) - I was stunned. Multiple regression is not the answer to every question. Hurumph!

[Wayne Z.]

This is unfortunately the state of economics as a discipline. Some small pockets of real thought exist, but they are rare. It is interesting that a thought leader in the computational social science field, R. Keith Sawyer, uses Durkheim as the basis for arguing against causality in socially emergent phenomena. Of course, many of the "generativists" in my discipline feel that agency and some sort of cognitive model can represent everything in society. Josh Epstein, from Brookings, is a leader of that school of thought.