Networks of Tinkerers: a model of open-source innovation

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Networks of Tinkerersa model of open-source
innovation

• Peter B. Meyer
• Office of Productivity and Technology,
• U.S. Bureau of Labor Statistics
• At OSS 2007, June 14, 2007
• All views expressed in this paper are those of
  the author and do not necessarily reflect the
  views or policies of the U.S. Bureau of Labor
  Statistics.

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Open-source technologies

• Goal here make micro model of individuals
  creating open-source technology
• Defn Advanced through openly-shared designs
• Open source software
• Early microcomputers at Homebrew Club, 1975
• Development of first airplanes
• Clearly documented, slowly over decades
• Since 1860s aeronautical journals and
  conferences
• 1894 Octave Chanutes overview book
• 1903 Wrights fly famous powered glider
• 1910 an industry exists

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Chanutes 1894 book Progress in Flying Machines
cites 200 experimenters, from all over
Experimenter / group Pages location (background)
Maxim 33 Britain (US)
Lilienthal 31 Germany
Penaud 22 France
Mouillard 21 Algeria, Egypt (Fr)
Hargrave 19 Australia (Br)
Moy 19 Britain
Le Bris 17 France
Langley 16 US
Wenham 15 Britain
Phillips 14 Britain
Later technological histories treat these top
several as central. Their findings were mostly
public. Patents in the US and Germany look
different there are many patentees, with one
each. Chanute says many are worthless.
Hargrave says its too soon to patent or keep
secrets.
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Hargravebox kitesexperiment,1894He thinks
all aerial navigation worked should be published
and nothing patented till something really
works.
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Lilienthal curved wing experiments

• For decades Otto Lilienthal studied birds and
  experimented on shapes in wind
• Published Birdflight as the Basis of Aviation,
  1889

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Motivations of experimenters

• Would like to fly
• Curiosity, interest in the problem
• Prestige, recognition
• Belief in making world a better place
• Make one nation safer
• Nobody refers to expected profits
• . . . A desire takes possession of man. He
  longs to soar upward and to glide, free as the
  bird . . . -- Otto Lilienthal 1889
• The glory of a great discovery or an invention
  which is destined to benefit humanity seemed
  dazzling. . . . Enthusiasm seized us at an
  early age. - Gustav Lilienthal

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For micro model

• Assume there are motivated tinkerers
• Assume total technological uncertainty
• no identifiable feasible market/product now
• so no competition
• Can show ? The tinkerers would share information

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Investment to gain more from network

• Programmers specialize on aspects of a project
• avoids duplication develops focused skills and
  tools
• And standardize code interfaces (or design, or
  part)
• so some progress by other tinkerers will snap
  right in
• In model
• Tinkerers receive fraction f of progress by
  others
• Suppose for cost cs, could raise that inflow to
  f2 gt f

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Specialization and standardization

• Thats worth doing if
• A player benefits more from this if, ceteris
  paribus
• other tinkerers produce a large flow of
  innovations p2
• gain in useful innovations from the others (f2-f)
  is large.
• cost cs is small For ß.95, p.07, f2.55, f.5,
  payback is 1.33 worth usual investment.
• Specialization and standardization are natural in
  tinkerers network. Tinkerers in model would be
  willing to pay.
• Dont need market processes to explain this
  behavior

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Role for author / moderator / evangelist

• Chanute corresponded with, visited, introduced
  experimenters, and published book
• In model A tinkerers best opportunity for a
  better program may be evangelism give up p1 for
  p2
• To welcome future tinkerers who could generate
  progress
• To avoid duplicate efforts, thru standards and
  specialization
• ? authors/evangelists are another kind of
  specialist tinkerer
• Octave Chanute, 1894 The writers object in
  preparing these articles was threefold
• 1. To satisfy himself whether . . . men might
  reasonably hope eventually to fly . . .
• 2. To save . . . effort on the part of
  experimenters trying again devices which have
  already failed.
• 3. To . . . render it less chimerical . . . to
  experiment with a flying machine . . . .
• Analogously Lilienthals public demonstrations
  Felsenstein at Homebrew open source programmers
  Stallman, Torvalds, etc.

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Wright brothers 1900-1902 left the network to
start a business

• Wrights were of open-source type.
• "I am an enthusiast . . . I wish to . . . if
  possible add my mite to help on the future worker
  who will attain final success." -- Wilbur
  Wright, 1899
• "At the beginning we had no thought of
  recovering what we were expending, which was not
  great . . ." -- Orville Wright, How We
  Invented the Airplane, 1953 p. 87
• They published, spoke at meetings, had visits
  from Chanute and others, showed everything.
• In late 1902 and subsequently they were more
  secretive. Why? Probably their patented wings
  from their wind tunnel experiments.
• Analogously, Apple founders left Homebrew Club

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Intellectual property and secrecy

• In each episode (airplanes, computers, open
  source software) many people want to avoid
  intellectual property and/or secrecy
• Hargrave thought all aerial navigation work
  should be published and nothing patented till
  something really worked.
• Chanute wanted to get all information out in the
  open
• Analogously Stallman, Fogel, other open source
  programmers
• In model intellectual property payments for
  sharing results of experiments would just
  introduce noise and friction on net. Incentives
  arent needed, and dont help, and there are no
  profits to split.

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Entrepreneurial exits in model

• Suppose a tinkerer envsions how to make a profit
  from project A worth more than the present value
  of staying in the tinkerers network.
• Then tinkerer can exit network agreement
• conducts directed RD
• stops listening to network
• becomes an entrepreneur

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Modeling exit to startup firm

• Suppose each player tries to see through the
  technological uncertainty and imagine selling a
  product based on A.
• At the start of each turn with probabilities p0
  and p1 each player envisions how to do this, and
  exits to take a large expected utility payoff of
  M for quitting the network and starting a firm.
• Anticipating this could happen they agree on a
  fee x to exit the network
• Then the payoff is something like
• Previous results hold, while the tinkerers
  network exists
• But incentives change once he makes the quantum
  leap to being an entrepreneur.

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Alternative models of invention

• (1) Network a population of agents with
  interest in a problem (a0), worthwhile
  opportunities (p), information flows between them
  (f)
• experimentation and socially constructed
  progress
• No pool of information, or incentive structure,
  or technical measure of improvement.
• (2) Race to be first (space race genome
  project)
• (3) Collective invention (Allen, 1983)
• but those are (a) firms, (b) not paying costs to
  experiment
• (4) To earn income or wealth indirectly
• Start company, or license patented invention
• signal to employers get hired as engineer
  (Lerner and Tirole, 2002)

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Conclusion

• Key assumptions of this model
• motivated tinkerers, perceiving progress
• no perceived path to profit
• cheap communication
• This generates inventions, as by
• Hobbyists
• Skunkworks inside organizations
• Basic researchers
• Better communications an effect of the Internet
  is that it enables networks.
• For our session an industry can arise this way