on Aug 7th, 2009Whats common between Free online ads and Open source

Disclaimer: I am not an Open Source hater. In fact, I am quite the opposite. I believe that for a innovative software marketplace to exist, there must be an equal mix of open and closed source softwares. This also borders on a project that I did on multiagent systems.

There are claims that Open Source will one day completely displace closed software. Same goes with free online advertising, sometimes also referred to as ad exchanges, where a person places an ad on his/her site and in turn gets his/her ad placed on somebody else’s site. There are claims that free online advertising will one day displace Google’s monopolistic hold on online advertising. Frankly I think most of these claims are exaggerated and baseless to a certain extent.

Am I the only one who has a problem with transactions that do not obey the traditional laws of Economics? The market, or as Adam Smith would say – the foundations of human society,  runs on the buy-sell model. When something is free, it means other non quantifiable commodities get traded, like goodwill and trust.  In such circumstances fairness is the biggest casualty. But is there really a model which can ensure fairness in these situations ?

Yes, there are plenty of trust based networks at play in our real life, but they all reach a saturation point. A typical game theoretic scenario, the person to defect first gets a very high payoff ; In a network, everyone else suffers. People will cheat, one way or another. Like I mentioned before, fairness becomes a higly debatable issue. Though, the categorical imperative bestows humans with decision making powers, it doesn’t state the thresholding for these decisions. The only final outcome of these networks is that one person is going to hit it big and make the others suffer.

Naturally the follow up question will be:  how does Open source survive? I explain this using results from game theory. In any homogeneous population, ie either a defecting or a co-operating , a small group of people,  co-operating with each other while defecting against the general consensus , always has the ability to hold their own and, in some cases, even win against the entire population. Examples of this are plenty in real life,  for ex: corruption or the mafia. So, as long as that small bunch of people stay loyal to each other, such networks will continue. Open Source, is slightly a more complex beast than I described it to be, but it broadly falls into the category I mentioned.

Incentive mechanisms like reputation points, virtual currency etc usually try and emulate a real world materialistic economy, but they are limited in their reach and appeal. Eventually, people loose the initiative to compete for these non materialistic resources. Besides, in a medium such as the internet, where identity itself is questionable, how will people trust each other. Has anyone ever wondered if those mails, which inform you of the billions you have won, were ever real? I guess not.

In conclusion,  I ask, is there some mechanism design or a strategy that can ensure fairness (provided its defined accurately) whilst ensuring the continuing growth of such trust based networks ?

5 Responses to “Whats common between Free online ads and Open source”

  1. ashwin on 07 Aug 2009 at 5:25 pm

    Am I the only one who cant make head or tail out of this :-) . Dork Dork Dork!

  2. ashwin on 07 Aug 2009 at 5:31 pm

    Secondly The fact remains that 80% of proprietary software is BLOAT. And win tops that list …
    Flame fool!!!!

  3. Deceth on 07 Aug 2009 at 5:55 pm

    Open source, as you already said, is a slightly more complex beast. I am no expert of this beast and under no pretense do I pretend to be.

    That being said, I do work on the development of open source software. Is there a strategy to ensure fairness? I don’t know. There are many different licenses available and perhaps some, better than others, encourage fairness.

    I am currently working under the GPL license. The software I am developing is free, but is it really? Maybe it still follows some buy-sell notions, because in return I receive free labour from other developers. Free hours worked to help develop my product is a pretty good deal for me. Since it’s GPL, it’s fair for contributors since they have the code and it becomes their product too.

    So perhaps some open source projects still follow traditional economic laws. For an independent developer to compete with commercial products, free and open is an exchange of freedom to the product for free labour in order to remain competitive in the market. Because open source is in the market if it is attracting potential users away from commercial solutions.

    So is there some mechanism design or strategy that can ensure fairness? I don’t know. It may be a matter of perspective, or dependent on the definition of fairness used. Because regardless of my “food for thought” posted above, I don’t earn a living from my open source work, I have a day job and open source development is a hobby. I’m sure that affects what I see as fair and not :)

  4. Ritesh on 11 Aug 2009 at 3:42 pm

    Hey Deceth,
    Licenses are probably the only thing preventing complete abuse of Open Source software. GPL does ensure attribution, but I dont know if I can call it fair;GPL 3 has some terms which are just insane. Anyway, in order for Open Source to survive, we need to ensure a mechanism in which people can contribute or use OSS, and they are not tied up by licensing constraints. There should be some mechanism by which contributing or using should ensure revenue for the contributors. The freemium model is something nice, but its still incomplete and may not work for all OSS.

  5. chrgkthr on 14 Sep 2009 at 10:11 pm

    Life is not a zero sum game. So the reasoning you have given in the 3rd para is incorrect.

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