Cooking pot markets: An economic model for the trade in free goods and services on the Internet

Abstract

It has long been assumed that there is something beyond economics involved in the proliferation of free goods and services on the Internet. Although Netscape's recent move to give away the source code for its browser shows that the corporate world now believes that it is possible to make money with free software - previously eyed with cautious pessimism - money is not the prime motivator of most producers of the Internet's free goods, and neither is altruism. Efforts and rewards may be valued in intangibles, but, as this paper argues, there is a very tangible market dynamics to the free economy of the Internet, and rational economic decisions are at work. This is the "cooking-pot" market: an implicit barter economy with assymetric transactions.