Economic value of Blogs and Open Source

Thor Muller from Ruby Red Labs has a conversation with an economist and the conversation turns around to blogs and open source projects like Wikipedia. The economist doesn't believe that they have any value because they don't conform to his economic models.

“I can’t explain them,” he replied. “They don’t make sense in our models.” He explained that the soft, social benefits normal people would use to explain such behavior weren’t measurable, and therefore didn’t exist.

Consequently he has no intent to address the anomalies.

“I don’t read blogs, either,” he said. “If they had anything of value they’d charge for it.”

Fascinating to me that an economist would ignore this phenomena!

In my humble opinion people that blog and do open source get many of the same benefits that an advertiser gets. They get their name out there, are established as experts in a subject area and this brings clear rewards later on.

Another benefit is the sheer joy of doing it. Participating in communities and conversations is plain old fun. People pay for entertainment all the time.

Would be wonderful to see someone do a real analysis of this phenomena though.

Comments

[kareem]

Perhaps it's time to change the economic model? Ignoring behavior that is occuring but ignoring it is akin to sticking your head in the sand and hoping your problems go away.

While I don't know that blogging & wikipedia behavior is necessarily irrational, economist Matthew Rabin is attempting to model irrational behavior in the context of economics:
http://www.berkeley.edu/news/features/2000/06/16_macarthur.html

Kareem