CONCLUSION

Peer production and FOSS represent a new mode of production. Its defining characteris­tics include (1) decentralization of conception and execution of problems and solutions, (2) diverse motivations, and (3) separation of governance from property and contract.

The core advantage of peer production is its capacity to harness diversely motivated and capable individuals in the context of persistent uncertainty and complexity. The freedom to operate that marks peer production, and the full organizational permeability of the practices, allow anyone with a potential to contribute to self-assign, experiment with resources, projects, and collaborations, and test the improvement produced in these experiments. This freedom to operate is purchased at the cost of rent extraction or appropriability. It is most effective when the costs of experimentation are relatively low, or susceptible to collaborative investment of small or pre-existing increments of capital, physical and human; when communication costs are low; and when the work can be performed with high modularity. These characteristics, all present in Internet- mediated production, explain the relatively high salience of these practices in the net­worked environment. Coupled with the high uncertainty and complexity introduced by a global, rapidly innovating effective market, the advantages of peer production are at their clearest.

Peer production successfully harnesses diverse and primarily intrinsic and self-policed motivations. This is important because it avoids the necessarily lossy (and costly in terms of transactions costs) process of formalization of information about individual capa­bilities and opportunities into prices or information packets susceptible to managerial decision-making, particularly where tacit knowledge or high diversity of experience and perspective are important, the lossiness of markets and hierarchies is pronounced, and the advantages of intrinsically motivated action clearest.

In order to preserve the relatively loose organization and freedom to operate, while permitting coordination and collaboration without triggering the dysfunctions of moti­vation crowding out or interdependence of motivations, peer-production processes avoid the authority of property and contract. They implement, instead, overlapping, incom­plete systems of governance, adapted dynamically to the particular instances of potential conflict or practical decision-making faced by the enterprise. These mechanisms are diverse, and their successful implementation depends on communication and recursive adaptation of practice to context.

NOTES

1. For example, Shapiro and Varian (1999) is an excellent example of the best understanding at the time. It characterizes the core dynamics of information and network production as related to high fixed, low mar­ginal cost, lock-in, network effects, and the experience good nature of information goods. Free and open­source software (FOSS) or what would become peer production; the role of diverse motivations - these play no role in the book, which uses the threat of Microsoft’s Encarta to Britannica as a core instance of the new models of network-based and information production.

2. A ‘copyleft’ license is one that uses copyright to assure that derivative works made from the work so licensed are themselves available to anyone under the same terms as the original work. It conditions the permission to use the work to create a derivative work (such as by improving or adding functionality to FOSS software), without which it would be illegal for the downstream developer to write that modification or development, on a provision that makes the derivative work (the modification or improvement) available under the same terms as they themselves relied on when they used the original license.

3. Games with a purpose was a platform created at Carnegie Mellon University by Van Ahn, which, between 2008 and 2011, harnessed the work of over 200 000 users to play games and, in the process, solve problems that computers could not solve.

4. North American Industry Classification System.

5. A search in Google Scholar on 2 August 2014 retrieved 4120 articles in which Wikipedia appeared in the title. Global rankings of websites can be based on different metrics. Based on the one-month Alexa traffic rank, a combination of average daily visitors and page views over the past month, Wikipedia ranked sixth as of 16 August 2014. See http://www.alexa.com/topsites; accessed 4 January 2016.

6. ‘In software engineering a project fork happens when developers take a copy of source code from one soft­ware package and start independent development on it, creating a distinct and separate piece of software’; see https://en.wikipedia.org/wiki/Fork_%28software_development%29; accessed 4 January 2016.

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