Incentives to be Open

A correspondent pointed me at a paper by Carliss Baldwin and Eric von Hippel, Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation, which builds on my papers in some interesting ways. Here’s one of the money quotes:

Building on arguments of Ghosh (1998), Raymond (1999), and von Hippel and von
Krogh (2003), Baldwin and Clark (2006 b) showed formally that, if communication costs are low
relative to design costs, then any degree of modularity suffices to cause rational innovators that
do not compete with respect to the design being developed to prefer collaborative innovation
over independent innovation. This result hinges on the fact that the innovative design itself is a
non-rival good: each participant in a collaborative effort gets the value of the whole design, but
incurs only a fraction of the design cost.

If this sounds familiar, it should. It’s descended directly (as the authors acknowledge) from my argument in The Magic Cauldron that open-source projects are an inverse commons which encourage collaboration because that minimizes downstream costs to participating selfish actors. But Baldwin and von Hippel cast a much wider net than just software by developing a picture of user-driven and collaborative innovation in other industries — sporting goods, of all things, make several walk-ons in the paper.

Their demonstration is interesting in part because it bolsters my economic case against the GPL. The authors are saying, in effect, that we do live in what I called a “Type B” universe, where efficiency incentives favor the open-source design of software. In fact, they think they have a formal proof of this result, but I haven’t seen their 2006b paper so I can’t evaluate it. And they argue that the result applies to other forms of engineering design as well. I am cautious about this: they may be right, but my own intuition is that the effectiveness of open-source methods is limited when the limiting factor of production is something other than human attention.

There is one assumption they make that I think is stronger than necessary:

By focusing on anticipated benefits and costs we assume that potential innovators are rational actors who can forecast the likely effects of their design effort and choose whether or not to expend the effort

But, in fact, forecasting of this kind is extremely difficult and I don’t think any model should assume open-source contributors actually do it routinely. That would be equivalent to solving the patch-valuation problem I pointed out in The Magic Cauldron; I think there are good Hayekian reasons to doubt this is even possible.

I think Baldwin and Hippel are closer to the truth of the matter when they talk about institutions being self-reinforcing collaborative games, and I want to suggest a way in which that can explain rational-actor behavior without assuming a degree of knowledge and forecasting ability that the individual agents don’t actually possess.

In institutional game theory, an institution is defined as the equilibrium of a game with
self-confirming beliefs (Aoki, 2001). Within the institutional framework, participants join or
contribute resources in the expectation that other parties will enact their respective roles. If all
behave as the others expect, everyone’s initial beliefs are confirmed: the pattern of action then
becomes a self-perpetuating institution. When the participants in the institution are rational
actors, one of their self-confirming beliefs must be, “I am better off participating in this
institutional arrangement than withdrawing from it.” On this view, a stable nexus of contracts,
a solvent firm, and an active open collaborative innovation project are all special cases of
institutional equilibria.

After this, Baldwin and von Hippel do some astute analysis of how changes in communication costs can make open-source collaboration viable. This is fine and worthy stuff; OK, so I got there first, but my arguments were qualitative and relatively informal. These two have have the analytical toolkit to be neoclassical where I was Austrian, and the degree of rigor they bring in is valuable.

But it seems to me that they are missing two other important effects: (1) rational evaluation of the collaborative game itself can substitute for forecasting the cost and value of particular design efforts, and (2) there is a sort of group-selection effect by which the relative success of different games changes individuals’ perceptions of the value of the one they are in. Where I am pointing here is towards nothing less than an economic analysis of the meaning and value of cultural loyalty.

Let us suppose that I, as an individual programmer, am exposed to the results of open source cooperation and find them beautiful and good. Because I want to be part of the culture that produces such things, I look for an open-source project to contribute to. I send a patch and experience the personal reward of seeing that it is incorporated in the project. Seeking that again, I contribute to this project, and perhaps to others.

I told a psychological story in the preceding paragraph, but I think there is an economic one underneath it. When the individual evaluates the products of the open-source culture are beautiful and good, he is learning confidence that his participation in the institution of open source is likely to bring him results he values. This confidence relieves him of the need to do a de novo payoff analysis for each bit of design effort he might invest. In effect, the manifest rationality of the entire game (judged by its products) reduces his decision costs with respect to any transaction in it. The effect is strictly parallel to the classical Coasian analysis of how firms lower decision and transaction costs for insiders.

With regard to my second point, institutions do not exist in isolation. Like firms, they have competitors. Competition occurs not just between individuals but between rival games, because institutions are selected for the ability to attract individuals to play their roles. Individuals judge institutions not only by their productive output in isolation but by their differences in productive output. Again, evaluation of these differences may, by reinforcing the beliefs associated with a winning institution, lower the individual’s decision costs about contributing design effort within it.

History matters, too. When an individual observes that an institution — such as an individual open-source project, or the entire open-source culture — has a long history of producing outputs of the sort the individual desires, that implies that it has competed successfully against rivals. This provides rational support for joining it, which again reduces the decision costs associated with any individual go/no-go choice about design effort.

There is yet another level: the individual knows that all the incentives operating on him also operate symmetrically on the other members of the institution. This edges us back towards the reciprocity incentives in the situation. I didn’t bring it up to rehash those but to point out that all these effects combine to reduce the overhead of making confident rational decisions about the payoff of individual design efforts from being somewhere in the knowledge-problem stratosphere to a level actual human beings can actually cope with.

Or, in other words: Yes, communication costs matter a lot. But so do loyalty, history, and trust.

36 thoughts on “Incentives to be Open

  1. Thanks Eric – it is always a pleasure to read your anaylses of the open source success story.

    I wonder how far we are from analyses such as yours being consciously applied as policy in private development firms? (Although having just typed it I wonder whether some variant of it may – at least historically – applied to contribute to Google’s story, for example).

  2. And they argue that the result applies to other forms of engineering design as well. I am cautious about this: they may be right, but my own intuition is that the effectiveness of open-source methods is limited when the limiting factor of production is something other than human attention.

    Actually what they provide is more or less an equation that the individual producer can use to determine whether open collaboration or single-user innovation will be the most profitable. They’re not actually saying that open collaboration is always more profitable, they’re quantitatively showing under which circumstances that open collaboration will be more profitable, with the interesting part being that as design costs increase and communication costs decrease, collaboration soon becomes the only viable solution from a profitability standpoint, unless the value of the innovation is sufficiently low.

  3. Another case against the GPL that I’m curious to learn more about is what I’ll call the “All Rivers Flow into the Sea” argument.

    It goes like this:

    #1- Flow. The more restrictive a software license is, the more likely it is that somebody, somewhere will find the license too restrictive and decide to duplicate the software under a less-restrictive license. If the license is extremely liberal, the only more-liberal “license” may be the public domain, i.e. no license at all.

    #2- One-way direction. Once a software product or feature is available under a more-liberal license or in the public domain it will always remain there. Public domain status is permanent.

    #3- Acceleration. The more open source a piece of software is, the easier it is to “lift” ideas and features from it without violating copyright law. This fact should act to accelerate the flow of software features from more-proprietary licenses into more-liberal licenses. The open-sourceness of a piece of software is usually binary, it is either open source or not, however, there are exceptions, such as an open source VNC client that connects to a closed source server. (If you consider the client and server to be part of the same software product.) Another example would be a video game that is open source except for an anti-cheat module.

    #4- Commercial allies. The more free a piece of open source software is, the more likely that some commercial entity will feel comfortable using it, and the more likely that they will eventually fund it or donate code back to it.

    So the trend over infinite time seems to be for a huge body of public domain software to accrete.

    But only if there are no other forces I’ve overlooked that are stronger than the four I outlined. I can’t think of any such forces. One candidate is the belief that some people have that the GPL is an important defense against Microsoft and other big companies, but I don’t think that belief is strong enough to overcome the basic annoyed tendency of programmers to want to work on completely-rule-free code.

  4. >Another case against the GPL that I’m curious to learn more about is what I’ll call the “All Rivers Flow into the Sea” argument.

    That’s not another case, it’s the same one. :-)

  5. History matters, too. When an individual observes that an institution — such as an individual open-source project, or the entire open-source culture — has a long history of producing outputs of the sort the individual desires, that implies that it has competed successfully against rivals. This provides rational support for joining it, which again reduces the decision costs associated with any individual go/no-go choice about design effort.

    History matters when comparing GPL-style and BSD-style licenses. The best choice of license in the past might have been different from the best choice of license in our future.

    I would suggest that the more aggressively anti-proprietary GPL-style licenses were necessary during the “learning” phase. These licenses enforced cooperation, and this cooperation generated the empirical evidence for cooperation as a winning strategy. i.e. GPL-style licenses acted as a catalyst that allowed us to shift from the Type-A pseudoequilibrium to the current Type-B world.

  6. I would suggest that the more aggressively anti-proprietary GPL-style licenses were necessary during the “learning” phase. These licenses enforced cooperation, and this cooperation generated the empirical evidence for cooperation as a winning strategy. i.e. GPL-style licenses acted as a catalyst that allowed us to shift from the Type-A pseudoequilibrium to the current Type-B world.

    I’m not sure that’s at all true, and to the extent the hypothesis is testable, I think it fails. Bill Gates’ plea to hobbyists not to copy his BASIC predated the first version of the GPL by 13 years. Certainly a lot of those copying the interpreter were writing and sharing programs for it.

    There is no doubt that the GPL appeals greatly to some peoples’ sense of fairness, and that it also fosters a sense of community built around shared ideals. In that sense, it may have helped nurture a hacker ethos, but I personally believe the hacking would have happened anyway. Also, the license may have helped educate companies that they needed to support their employees in giving back some software to the wider community, but as this paper points out and Eric has argued before, the timesheet showing the cost of the 300th local merge back to the trunk in order to get features that somebody else added to the trunk without losing any proprietary functionality just might provide equivalent education. In fact, I think a compelling argument could be made that the availability of CVS was more important than the license, as an enabler of sharing, and that when searching for a license to slap on new code to be shared, the license of the free tool chain and version control software used to create the new code would almost always be deemed “good enough” in a vacuum.

    Certainly packages like Python, perl, and apache did not suffer from not using the GPL.

  7. esr Says:
    > >Another case against the GPL that I’m curious to learn more about is what I’ll call the “All Rivers Flow into the Sea” argument.
    > That’s not another case, it’s the same one. :-)

    OK, point taken. All the people in my case were seeking the market efficiency described in your case.

    I think it is very interesting that even if everybody in the market behaved completely randomly regarding what license they preferred, software would still strongly tend to flow into the public domain over time, because those who chose proprietary licenses would have to reinvent the same wheels over and over again, whereas whose who chose open source licenses would often discover that some of their problems were already solved and freely available for reuse.

    That sounds like a very strong indication that open source software is the more efficient market state.

  8. ESR,

    Out of curiosity, have you read Elinor Ostrom’s Governing the Commons? It is relevant to this discussion, though it discusses common-pool problems more than inverse commons.

  9. >I would suggest that the more aggressively anti-proprietary GPL-style licenses were necessary during the “learning” phase.

    I think this position is at least defensible. I’m not convinced of it, mind you, but it doesn’t contradict a rational-minimaxing analysis.

  10. >>I would suggest that the more aggressively anti-proprietary GPL-style licenses were necessary during the “learning” phase.

    >I think this position is at least defensible. I’m not convinced of it, mind you, but it doesn’t contradict a rational-minimaxing analysis.

    The GPL to establish a new equilibria… the gpl as a ‘gateway licence’ leading to bsd? Makes sense to me.

  11. > the gpl as a ‘gateway licence’ leading to bsd? Makes sense to me.

    in a similar way to linux being a ‘gateway OS’ to BSD (and Apple)?

    (chortle)

  12. What a lot of academic gobbledygook that ultimately just says that FOSS is a cult, with similar self-reinforcing behavior. First we had the cult of free software, with Stallman preaching the gospel of all source being free. Then we had the cult of open source, with Raymond trying to elevate this communitarian philosophy to some sort of economic respectability. Both cults keep repeating that they’re winning, despite all evidence to the contrary. Naturally, established players like IBM or Google were glad to take advantage of such naivete. IBM because they lost the software battle and wanted to undercut the software vendors by just selling hardware and support. Google because they just want to spread search advertising everywhere and don’t care about making money off the software itself. Other than such cynical ploys, open source is just a hobbyist movement right now, a bunch of geeks spinning their beanies for fun. I’m glad these developers enjoy coding in their spare time too, but it’s funny when the open source zealots try to extrapolate this hobbyist wrenching into some sort of world-changing movement, despite the repeated failure of promised holy grails like desktop linux.

  13. > a bunch of geeks spinning their beanies for fun.

    only when they run out of hand-lotion (sex lube).

    chronic masturbators, … all of them.

  14. IBM because they lost the software battle and wanted to undercut the software vendors by just selling hardware and support.

    PCs and PC operating systems were never really a core part of IBM’s business; the IBM Personal Computer was originally developed by a rogue team in Boca Raton, FL, and later became a key strategy for IBM to leverage its growing mainframe monopoly by making sure they controlled and directed the PC revolution, at least in the beginning. OS/2 was developed for much the same reasons. IBM “lost that battle” years before they became involved in Linux; on other fronts, they basically won the high-end proprietary Unix server market and they continue to dominate in big iron.

    IBM’s migration to software and services (and server and mainframe hardware) is just a reflection of the realities of the market: software and services are the areas where the most money is to be made, and one-size-fits-all solutions are no longer a viable source — IBM is happy to let Apple and Microsoft have what’s left because they know that the OS and desktop application suites that they currently control are becoming nothing more than a commodity and that in the end, open source will win by being the cheapest solution. The money to be made is in integrating all the diverse pieces into an overall IT system and strategy, and their strategy is just a reflection of that.

    Google’s strategy is to own and control “the cloud.” Advertising is but one monetization strategy that Google is pursuing — it’s just the biggest one right now because that’s what’s buttering their bread.

    Open source is far from it’s hobbyist movement roots. Even Microsoft has recognized that by having an open source strategy of its own.

    For further reading:

    Integration is where the money is: http://news.cnet.com/8301-13505_3-10471845-16.html
    Office doesn’t matter anymore: http://news.cnet.com/8300-13505_3-16-1.html?tag=mncol
    Microsoft’s open source strategy: http://blogs.zdnet.com/microsoft/?p=1142 and from the horse’s mouth http://www.microsoft.com/windowsserver/compare/webcasts/open-source-evolution.mspx

    and even Forrester Research believes that open source will continue taking over large slices of the software stack: http://news.cnet.com/2009-1069-981484.html

    Sorry, Ajay, but the rest of the IT world simply doesn’t agree with you.

  15. Other than such cynical ploys,

    Such “cynical ploys” are explicitly the business models for Open Source Software. At least if you have read ESR’s work explaining those models. In CatB, he goes into great detail explaining the insanity of the idea of selling software, as if it were a product coming off an assembly line in a factory. Instead he says the best play is giving the software away and selling the services (installation, customization) that those who have the most expertise with the software will necessarily be best at. The IBM and Google models are far from “cynical”; they are the point.

    Unless, of course, you’re a raving Leftist who thinks a company making a profit is inherently evil, but exorbitant union-scale wages are not just hunky but dory.

  16. Then we had the cult of open source, with Raymond trying to elevate this communitarian philosophy to some sort of economic respectability.

    So sorry, but you don’t seem to understand the difference between economic policy and economics. If the model’s internal logic checks out, then open source is economics, whether or not it is ever realized in the physical world.

    Economics is like math in that respect.

  17. Morgan, ooh, IBM lost the PC battle long before they embraced linux, that really demolishes my argument. EndOfSarcasm Thanks for the boilerplate explanation of IBM’s software-plus-services strategy that I read in Fortune magazine a decade ago, tell me something I don’t know. Advertising is but one monetization strategy for Google? It is 99% of their revenues. If they sell some kid a candy bar for 50 cents, does that add up to another monetization strategy? Please. Open source has mildly progressed beyond a hobbyist movement, to the extent that large corporations like IBM or Google are perfectly willing to exploit such idealists and that there exist a few Red Hat’s or Novell’s here and there. However, we are very far from the future of open source everywhere that proponents predict, and I see no way that the current model will get us there. As for what the rest of the IT world thinks, these are the same dimwits that think iPhoneOS will be the dominant mobile OS. Wake me up when open source is making some money; oh wait, we’re a decade in and it’s still a rounding error compared to closed source revenues.

    The Monster, it is funny when you espouse such a communal ideal of code sharing with no property rights then accuse me of being a leftist. :) If you believe support/consulting is the point, why is it still a small fraction of revenues compared to closed source? Is it possibly because pure open source can’t compete against closed source? As for when Google became an established player, they didn’t release open source products like Chromium or Android till they became established and had some money in the bank.

    Mastiff, haha, you think math checks out, whether or not it is ever realized in the physical world? I see you’ve been infected by the cult of math. ;) I don’t think you understand that nobody’s talking about economic policy. Either open source has valid economics behind it or it doesn’t. Raymond tried to make a theoretical case for the economics of open source, but we now have plenty of empirical evidence that pure open source economics can’t beat closed source.

    I understand and respect the arguments for open source, that has allowed it to carve out a nice little niche for itself. However, extrapolating that niche into future dominance is foolish, particularly considering the past decade of failure to get out of the server/consulting ghetto or to even dominate that niche.

  18. The Monster, it is funny when you espouse such a communal ideal of code sharing with no property rights then accuse me of being a leftist.

    I did neither thing.

    The GPL explicitly recognizes the rights of the creators of software, those rights are the basis of its legal authority.

    I offered being a Leftist as a possible explanation of how you could call the IBM and Google open source policies “cynical”. You haven’t explained how that term applies, especially in the case of Google, which has used open source software since Day One.

  19. Mastiff, haha, you think math checks out, whether or not it is ever realized in the physical world? I see you’ve been infected by the cult of math.

    You miss my point. I said that the internal logic checks out, just as the internal logic of a mathematical system checks out.

    ESR, or some other author, lays out an economic model with a certain set of axioms and rules. Given these axioms and rules, the author can then derive certain behaviors. That, in itself, is formal economic modeling. It has nothing to do with whether the axioms correspond to anything in real life.

    Now, for such a model to actually be useful, the axioms and rules will need to actually describe something in the physical world. But it is not necessary for a model to be useful.

    This is rather like the relationship between math and physics. That speculative math often ends up having unexpected uses in physics says more about the nature of the universe than it does about abstract logical systems.

    To be clear, I’m not necessarily attacking your argument, just your terms. ESR’s argument was, in fact, economics, whether or not it was practical.

  20. Ajay Says:
    > Raymond tried to make a theoretical case for the
    > economics of open source, but we now have plenty
    > of empirical evidence that pure open source
    > economics can’t beat closed source.

    Can’t beat closed source at what game?

    If the goal is to sell copies of software, then I agree that you can’t normally sell copies of open source software at all, so closed source software wins that game. Although, indirectly, money can be made by selling support for copies of open source software. I understand Red Hat and Ubuntu both earn some revenue that way.

    If the goal is to cut internal expenses, thousands or millions of real businesses are using open source Linux servers. Open source probably wins that game even if you put stock in dubious arguments about total cost of ownership. Businesses also save money by using open source libraries.

    I’ll guess ESR would agree that open source wins battles because and whenever it happens to be more economically valuable than closed source. In other words he’s roughly the polar opposite of a communist; he’s not arguing that everybody has some flower-power right to getting great software for free, he’s arguing that open source is free because natural market forces make businesses more profitable when lots of open source software is available.

  21. Monster, saying that the GPL explicitly recognizes the rights of creators and their legal authority is like saying that communist govts recognize the rights of their populace and that their rights are the basis of such a govt’s legal authority. In other words, whatever rights-based model you assert is irrelevant when employed towards such communal ends. It’s funny how you think anyone labeling certain corporate actions as being cynical means they’re likely a leftist, simply because any action by a corporation is being negatively labeled. :) It’s cynical for the reasons I already gave, that those corporations are profiting off the free work done by altruistic open source idealists and trumpeting open source only so they can profit off more such free work. What does it matter if Google used open source since day one? They didn’t release any source or start programs like Summer of Code till they were well-established. I see that you simply ignored the questions I put to you, while continuing to repeat your non sequitur about Google.

    Mastiff, your point was easy to understand, my point was that such toy models are fairly worthless. We can always create a toy physical model of a car that’s driven in an environment without any wind resistance, but the results derived would be completely worthless for any real world use. What does speculative math having unexpected uses say about the nature of the universe exactly? What I see is that the physicists overuse math and the engineers and economists, suffering from math penis envy, stupidly ape them, largely to no purpose. I never said his arguments weren’t economics, so you’re not even criticizing the terms of my argument, all I said originally was that he tried to bring some economic respectability to open source. I later said that those economic arguments have since been empirically proven to be swamped by the far better economic model of closed source, ie the revenues of closed source are far more powerful than the claimed efficiencies of pure open source.

    techtech, at practically every game? As far as I can see, open source has only managed to carve out a niche in commoditized markets like unix servers or where innovation is constrained by open standards, such as web browsers or networking software. I don’t deny that open source has attained some share in a few niches like that, I just find it silly when open source acolytes extrapolate that extremely limited success to a future of open source everywhere. I know Eric’s not a communist, but I do find it strange that he finds it important to defend and try to explain such a communal model, to the point of insisting on its success despite its demonstrated failure to break out of the server/consulting ghetto.

    Jake, what is that link supposed to prove? It’s just some random guy saying that hybrid deployment is better on IBM’s website.

  22. >despite its demonstrated failure to break out of the server/consulting ghetto.

    Thanks for that. I needed a good laugh.

  23. >espite its demonstrated failure to break out of the server/consulting ghetto.

    Are you really _that_ allergic to reality?

    When I do the weekly preparations for my band’s rehearsal, I
    - browse the ‘net for music with firefox
    - write the leadsheets with openoffice
    - do the guitar/bass tabs with tuxguitar
    - listen to the music with VLC
    - convert music to MP3 with lame/razorlame

  24. Haha, two people use software that nobody else uses, claim that open source is winning, and laugh about how everybody else is disconnected from reality? Priceless. :) What is the market share for VLC again? Open Office and Firefox are forever “on the verge” of taking over, except they’re always also rans. I’m glad you found open source software that works for you- I run FreeBSD on my desktop and happen to only run OSS myself- but if you believe anyone else other than us geeks is using this stuff, you guys are seriously deluded.

  25. Well, Ajay has a point, although it is not as broad as he thinks. For example, lots of embedded devices successfully make money selling to non-geeks using open source as well – see Android.

    You all can mock each other as much as you want, but the truth is that both sides are overstating their cases, perhaps in a snarky attempt to brow beat the other side into rhetorical submission. This never works. Ajay, you are the one who is using this tactic the most at the minute, and it is an epic fail.

    Yours,
    Tom

  26. The irony of my overstating my own case as a snarky attempt to brow beat people into rhetorical submission was lost on me when I wrote the above. It’s not lost on me now. I am chagrined.

    Yours,
    Tom

  27. “I am cautious about this: they may be right, but my own intuition is that the effectiveness of open-source methods is limited when the limiting factor of production is something other than human attention.”

    Does this basically mean that the open source model doesn’t apply for non-rival goods production or am I missing some subtle economic distinction? If it does, then my intuition is telling me the same thing yours is telling you.

  28. >Does this basically mean that the open source model doesn’t apply for non-rival goods production or am I missing some subtle economic distinction? If it does, then my intuition is telling me the same thing yours is telling you.

    Your first guess would be backwards: open source works better for non-rivalrous goods, because that means contributors can get back as much as they put in.

  29. Er…I meant “rival goods”, sorry.

    Under what circumstances can the open source model work for rival goods?

  30. >Under what circumstances can the open source model work for rivalrous goods?

    I don’t know of any. As far as I know, nobody has ever tried to use open-source methods to produce rivalrous goods. Designs, yes, but not goods.

  31. > As far as I know, nobody has ever tried to use open-source methods to produce rivalrous goods. Designs, yes, but not goods.

    How about the arduino? http://arduino.cc/

  32. >How about the arduino? http://arduino.cc/

    That’s interesting, and I see the designs are open source…but in what way are the rivalrous goods – the physical instantiations of the designs – special?

  33. > Haha, two people use software that nobody else uses, claim that open source is winning, and laugh about how everybody else is disconnected from reality? Priceless. :)

    I’d agree, except for Firefox. Firefox is an anomaly among open-source software. As I see it, successful open-source software has fallen into three cases: 1. Where it is more important to interact smoothly with machines than with humans (e.g. server software), 2. Where a bondage-and-discipline luser experience is acceptable or even desirable (e.g. embedded devices) and 3. Firefox.

    Everything else (linux on the desktop, open office, GIMP, et. al.) has been stuck in the “by programmers, for programmers” ghetto.

  34. >>How about the arduino? http://arduino.cc/

    > That’s interesting, and I see the designs are open source…but in what way are the rivalrous goods – the physical instantiations of the designs – special?

    In a few ways:

    1. One family of rivalrous goods are the commercial boards. The arduino boards are relatively cheap, are programmed with c and are built for extensibility. A whole market has developed to sell wires, sensors, actuators and other add-ons in a very short time. I believe many of these goods will become cheaper as time goes on and more people adopt the arduino for professional and hobbyist pursuits, making the arduino family even more competitive.

    2. Different arduino hardware vendors create boards that match the spec. Some are produced with cheaper parts and others have improvements of various sorts. For example, one hardware vendor that produces an arduino-compatible board has doubled the boot loader’s speed.

    3. Another difference between the arduino-compatible hardware vendors are the accessories. Different vendors compete on the prices of wires, breadboards, sensors, actuators and other common accessories. Some of them create their own add-on modules specifically for arduino-compatible boards. So if you want a wifi board that plugs into an arduino, you will be more inclined to buy the wifi board with an arduino-compatible board from the same vendor, especially if you get a deal on getting them both. A quick search on youtube will show you all kinds of creative projects by hobbyists, professionals and, significantly, academics (look up “arduino mario bothers” or “arduino etch sketch” for a couple of my favorites).

    The interesting thing here is that the original arduino company isn’t worried about competition, and they don’t sell accessories (as far as I know). The “bazaar” that’s built up around their products (physical boards *and* technical specs) encourages them to churn out newer and better boards and specs.

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