Coordination and Judgment in the New Economy

Wikipedia, Firefox, and Amazon Mechanical Turk are examples of distributed problem solving made possible by the Internet. A central challenge that these collective efforts face is to coordinate among participants in a timely fashion. I review some of the practices that have emerged among the communities around these efforts and show how this has helped them to gain flexibility in the problem solving process. I then adopt Langlois' Entrepreneurial theory of the firm to shed light on how business might benefit. Potential benefits are two-fold, I argue. Understanding of the intricacies of open source collaborations enables firms to tap in to the fruits of such collaborations. It also allows firms to improve their internal organization.