Public Markets (Jan 6, 2006)
This issue of mathematical markets is described in the HDM Manifesto. I closed out the recent page on public domain vs copyleft (and copyright) with a theoretical scheme for developing a market for public domain software. While we haven't really begun an analysis of the effect that a large body of public domain software might have, this scheme lends some support to the idea that we could, potentially, foster the creation of a lot of public domain code – through essentially purely economic means. If this worked, the market would be taking over a large part of the work currently being accomplished through licensing instruments. Which is fairly interesting (and, of course, this is one possible future direction for investigations of free software licenses).
One of the more exciting pages on the scholium system concerns some potential business and economics applications. The idea here is to make more information about various goods available to consumers, with the notion that, often times, a good is little more than the sum of all information appertaining to it.
A can of Coca-Cola, for example, is 39 grams of sugar, 12 fluid ounces of carbonated water, with a dash each of flavoring, coloring, and caffeine, which is then covered in red and white painted aluminum and buttressed by a whole lot of advertising. But what you actually buy when you buy a can of Coca-Cola is much more complicated; the effects of that purchase on the local and global environment, economy, your own health, the world political situation, the Atlanta school system, etc., all could be spelled out to amount to something much more than "140 kCal".
Notice that paying an artist to create a statue amounts to something rather different from paying a musician to compose or record a song. Because, the former artwork is locked up in a readily-excludable medium, copyright and royalties (while they might apply) are typically less important for sculptors than they are for recording artists.
However, we propose to apply a uniform principle that compensates creators for producing deliverables based on informational aspect of the work! (Works can include things like sculptures and bridges as well as programs, novels, and sound recordings.) The fact that public domain works aren't excludable doesn't mean that the producers of such property can't be compensated for their work.
Sometimes the transactions aren't monetary and sometimes they are. So, for example, a Project Gutenberg-based library might contain many side-discussions not done for hire, but for the joy of discussing interesting literature with other interesting people, or for purposes of answering homework questions, or whatever. Of course, such a library might also contain some works done for hire; and the different kinds of transactions can be mixed, some handled more formally (through the market) and others more informally (though out-of-market voluntary contributions or other non-market transactions). But the general idea is that the "market" (in a broad interpretation) grows to include many different kinds of transactions.
The example of code bounties and feature requests for PlanetMath makes this concrete. In this case, people requesting new features can say what they will offer to help with the development of those features (which could money or time etc.), and also what might be required to implement the new feature. Several people might participate in these sorts of transactions (an initial requester, a project manager, a programmer, and an outside expert, for example); and the final result would be that the feature would be implement.
And the nice thing about this, is that we can actually go ahead and implement a basic, skeletal, market using very simple technologies – like this wiki, for example. Later, this thing could be fleshed out and brought to bear on a much wider range of products and services.