Tim Wu on Open vs. Closed Designs

Tim Wu in the New Yorker on Open vs Closed Designs… posing the question (and indicating the answer) “Does a Company Like Apple Need a Genius Like Steve Jobs?”:

“The triumph of open systems revealed a major defect in closed designs. As a matter of economic theory, in a state of perfect information, a central designer should be able to produce a better product. But that only follows if the future is predictable, and if you ignore the tendency of humans to make boneheaded mistakes. In a closed system, with one decision-maker, errors are very costly. Stupid decisions, or compromising the product for short-term profit, will make it not just a bit worse but much worse than the open competitor. For example, AOL’s “walled garden” of the nineties tried to guess what users wanted, but AOL made lots of mistakes, and it was ultimately no match for the open Web.

An open product, in contrast, is better buffered against human error, because no one entity makes a decision that can destroy the product. The economists Tim Bresnahan and Shane Greenstein, writing in the nineteen-nineties, described this as “divided technical leadership,” and they meant that as a good thing. The product is the collective result of many, and sometimes thousands, of decision-makers. An open product can also take advantage of collective, voluntary contributions of the masses, a point emphasized by Yochai Benkler. Consequently, an individual Wikipedia entry might be lousy and contain errors, but the entire corpus will remain impressive.”

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2 Responses to “Tim Wu on Open vs. Closed Designs”

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