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What Is “Open”? An Economic Analysis of Open Institutions

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  • Deng, Feng

Abstract

By examining several different types of open institutions including open source software, open science, open square and (open) urban planning, this paper presents a general analysis of open institutional structure that is complementary to traditional proprietary mode. We argue that open institutions, in whatever forms, are essentially about decentralized production of a collective good (or “commons”) that relies on voluntary collaboration of highly variable human-related input. In addition to providing a general definition of open institutional structure, we submit there are two necessary conditions for open institutions. The first is the integration of consumers into production. The second condition is that the efficiency gain from “production” commons is the objective and the tragedy of anticommons becomes a serious problem. In this sense, open institutions represent a positive approach toward externality and uncertainty.

Suggested Citation

  • Deng, Feng, 2008. "What Is “Open”? An Economic Analysis of Open Institutions," MPRA Paper 8888, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8888
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    File URL: https://mpra.ub.uni-muenchen.de/8888/1/MPRA_paper_8888.pdf
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    References listed on IDEAS

    as
    1. Buchanan, James M & Yoon, Yong J, 2000. "Symmetric Tragedies: Commons and Anticommons," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 1-13, April.
    2. Josh Lerner & Jean Triole, 2000. "The Simple Economics of Open Source," NBER Working Papers 7600, National Bureau of Economic Research, Inc.
    3. Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
    4. Bruce Kogut & Anca Metiu, 2001. "Open-Source Software Development and Distributed Innovation," Oxford Review of Economic Policy, Oxford University Press, vol. 17(2), pages 248-264, Summer.
    5. F. Frederic Deng, 2003. "Collective Goods and the Political Hold-Up Problem," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(2), pages 414-434, June.
    6. Francesco Parisi & Norbert Schulz & Ben Depoorter, 2004. "Simultaneous and Sequential Anticommons," European Journal of Law and Economics, Springer, vol. 17(2), pages 175-190, March.
    7. Andrea Bonaccorsi & Cristina Rossi, 2002. "Why open source software can succeed," LEM Papers Series 2002/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    8. Langlois, Richard N & Foss, Nicolai J, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-218.
    9. Cheung, Steven N S, 1970. "The Structure of a Contract and the Theory of a Non-exclusive Resource," Journal of Law and Economics, University of Chicago Press, vol. 13(1), pages 49-70, April.
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    12. David, Paul A, 1998. "Common Agency Contracting and the Emergence of "Open Science" Institutions," American Economic Review, American Economic Association, vol. 88(2), pages 15-21, May.
    13. F Frederic Deng, 2003. "The Rebound of Private Zoning: Property Rights and Local Governance in Urban Land Use," Environment and Planning A, , vol. 35(1), pages 133-149, January.
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    More about this item

    Keywords

    open institutions; collective good; open source software; open science; open square; urban planning;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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