Economics of Social Production

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Economics of Social Production - Presentation Transcript

  1. The Economics of Social Production Benkler, Chapter 4 Presentation by Mindy McAdams
  2. Productive Behavior Is Changing
    • Why do people participate in nonmarket production?
    • “ Why now, why here?”
    • Is all this sharing efficient ?
  3. What Motivates People to Produce?
    • Titmuss-Arrow debates (blood banks)
    • Extrinsic reasons vs. intrinsic
    • Social reputation or face
    • Loyalty or friendship
  4. Review: Inputs Needed
    • … for production of information goods today
    • Human factors: Time , creativity, wisdom, knowledge, culture
    • Computers (for production)
    • Networks (for distribution)
  5. Modularity and Granularity
    • Tasks ( parts of a project) can be broken down into modules
    • The size (length of time needed) can be more or less “fine grained”
    • Granularity is a measure of module size
  6.  
  7. Amazon’s “Mechanical Turk”
  8. Modularity and Granularity (2)
    • The Web makes modular tasks easy to distribute
    • Also easy to share the outcomes (products) of a difficult task with millions of other people
      • E.g., “The Memory Hole” -- information retrieved from the U.S. government via FOIA requests
  9. “The Memory Hole” site
  10. Transaction Costs and Efficiency
    • Scarce resource No. 1: Human creativity, time, and attention (rival)
    • Scarce resource No. 2: Computer and communication resources (rival)
    • Public good: Information, knowledge, culture (nonrival)
  11. Transaction Frameworks
    • Markets (buy it on the open market)
    • Firms (get it from within a cartel or group or corporation, to which I belong)
    • Social networks (get it for free from my neighbor) – remember the intrinsic motivations!
  12. Nonmarket Real Estate?
  13.  
  14. Structures of Transactions
    • Characteristics:
      • Market transaction must be “crisply” delineated
      • Social exchanges are not “crisp” at all
    • Social systems are not cost-free
    • Pricing of human time and talent varies widely across professions and locations
  15. Efficiency of Social Sharing
    • Identify the best person for the job
    • May be substantially less expensive
    • Tap into people’s social/psychological motivations
    • Provide a sustainable alternative to ( not a replacement for) market transaction systems
    • Utilize (not waste) human creative capacity
  16. When Is It Not Effective?
    • When the means of production required are expensive, or hard to get access to (e.g., large machinery)
    • When the raw materials are expensive, or hard to get access to (e.g., steel)
    • When technology or systems do not permit sharing
    • When people have no time to spare
  17. Social Production & Market-based Businesses
    • Social production makes use of time and energy that would usually be wasted in a purely market system
    • The effect on market activities is not neutral, however
  18. Social Production & Market-based Businesses (2)
    • Social production poses real threats toward (some) market-based activities and enterprises
    • Understand these threats -- and we will understand why certain policies and laws are pushed forward (and who would benefit?)
    • Contracts vs. “cloud” (role of predictions)
  19. Social production changes the system. The more it changes the system, the more important it becomes to the system .
  20. User Innovation Networks
    • Can function entirely independently of manufacturers when:
      • At least some users have sufficient incentive to innovate
      • At least some users have an incentive to voluntarily reveal their innovations, and
      • Diffusion of innovations by users is low cost and can compete with commercial production and distribution
    -- Eric von Hippel (2002)
  21. User Innovation Networks
    • If the first two conditions hold but the third (low-cost distribution) does not:
      • A pattern of user innovation and trial and improvement will occur within user networks, followed by --
      • Commercial manufacture and distribution of innovations that prove to be of general interest
    -- Eric von Hippel (2002)
  22. The End Benkler, Chapter 4 Presentation by Mindy McAdams

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