When Apache software successfully claimed more than a 50% market share against Microsoft, researchers were, theoretically speaking, at a loss. After all, organizations that produce goods or services do so using one of three mechanisms (Benkler 2002): hierarchies, markets, or hybrids of the two. Hierarchies allocate and produce by managerial fiat, markets use price, and hybrids use some combination of the two. To get inputs for a product, you must either make or buy them. What other choice is there?

In the Open Source movement (Pitt et al. 2006), another option seems to have emerged. Open Source projects use voluntary, nonpaid efforts. Such an alien notion!

Explanations for Participant Motivation
In fact, the Open Source notion should not feel particularly alien to an academic. The academic knowledge value chain is organized similarly. Many journals are published by not-for-profit organizations. Authors are not paid. Reviewers are not paid. Even editors frequently perform their labor of tough love for modest or no reimbursement. The search for volunteer motivation in Open Source projects (see, e.g., Shah 2006) should sound familiar to any professor. An article, Editorial Review Board listing, or editorship enhances one's reputation and provides learning, feedback, and other extrinsic rewards. Plus, it is interesting and fun!

Explanations for Competitive Advantage
Given that we academics might understand what motivates a programmer to program for free, this still leaves an open question as to how a loosely organized group of volunteers can compete against one of the world's corporate juggernauts, Microsoft.

Because software, such as the music your students probably download, is an "information good," we know that it can be easily copied and disseminated, that is to say it is what economists call a “public good.” As such, there tends to be a high cost associated with property rights enforcement (Benkler 2002). The cost to the firm (and to society) of this enforcement has been called the Tragedy of the Anti-Commons (Kogut and Metiu 2001), in a pun derived from the classic "Tragedy of the Commons," that arises from too little property rights enforcement.

These "anti-commons" costs can render information work less efficient. For example, consider a company's internal labor market. All companies must match individuals to tasks either by fiat or by using cold hard cash in external markets. Now contrast this to the Open Source development process. In that case, inexpensive electronic means are used to match tasks and human assets—a sort of cashless eBay for labor. Often, the group of participants is both larger and more diverse than would be a typical corporation. What's more, each individual decides to participate based simply on his or her assessment of his or her own ability. After all, who knows what you can do better than you? In more technical terms, we can say that there is tremendous information asymmetry with respect to human talent (Benkler 2002).

An Open or Closed ARC?
I believe in an Open Source-like model for the ARC. There are few extrinsic rewards for contributors, and so gating off contributions and not allowing contributors to maximize the reputation benefits will be self-defeating. I also note that the more contributors there are, the more readers there are, and vice versa. An open ARC is sure to create more value than a gated ARC.

But there are monetary costs to publishing the ARC—hardware, software, and my compensation as editor are but three. These costs are borne by AMA members in the form of dues. Therefore, we have a potential for the classic "free-riding" problem of economics. In short, some academics might ask themselves why they should pay dues to receive the benefits of membership that are freely available anyway to nonmembers. Thus, we come to a conundrum. An open ARC will have better content than a gated site. But it is also theoretically possible that an open ARC will lead to defection in the face of the temptation to free-ride.

I would love to hear what YOU think about this issue. Give me your opinion at arc@ama.org.

References

Benkler, Yochai (2002), "Coase's Penguin, or Linux and the Nature of the Firm," Yale Law Journal, 112 (3), 369–436.

Kogut, Bruce and Anca Metiu (2001), "Open-Source Software Development and Distributed Innovation," Oxford Review of Economic Policy, 17 (2), 248–66.

Pitt, Leyland F., Richard T. Watson, Pierre Berthon, Donald Wynn, and George M. Zinkhan (2006), "The Penguin's Widow: Corporate Brands from an Open-Source Perspective," Journal of the Academy of Marketing Science, 34 (2), 115–27.

Shah, Sonali K. (2006), "Motivation, Governance, and the Viability of Hybrid Forms in Open Source Software Development," Management Science, 52 (7), 1000-1014.