Redhat (along with many other Linux distributers) has been involved in the creation of many standards (e.g. freedesktop.org defacto standards) and they’re still profitable. I guess that most successful open standards are not directly attributable to a single company and therefore it’s hard to ask whether the company that created them is still profitable.

It will be interesting to see whether Sun can make money with StarOffice now that OO and the ODF standard that it spawned is gaining traction in the market.

(P.S. Spam Karma 2 fixed my WP spam problems with amazing efficiency)

f(x)) has an incentive to provide a public good. Thus, your conclusion (”a traditional capitalists system is inferior for providing a public good”) is neither a surprise nor new.

However, you seem to be looking at situation where the inventor can exclude people from using a ’standard’, thereby making it a club good. Again, it’s no surprise that anybody acting economically will turn a public good into a club good if he can. Otherwise, the free-rider problem will soon make him a poor inventor (assuming no price differentiation).

Second, what you fail to provide is an argument why a public good is superior to a club good. You just seem to assume this by writing “open standards are a net societal good”.

So, it might be worth thinking the other way, too: How many volunteer projects were indeed successful in creating an open standard? IIRC, many of the Open Source ones were just fighting eachother; in the best tradition of engineers who disagree what’s the best technical solution althought the economy might be better off with only one solution. Think office formats (Koffice vs. GOffice), KDE vs. GNOME, etc. If you’re looking at it this way, it might be useful to also examine whether a closed standard is inferior to no standard.

Btw, since you asked for “tweaks”: The wikipedia page about public goods show a number of proposed solutions in the literature.

I wasn’t sure whether I understood you correctly, so please excuse if you’ve already thought about the things I mentioned but just didn’t post them here.

First, any true standard is a public good: You cannot exclude one from using it, and there’s no rivelness. As such, it suffers from a free-rider problem, and thus nobody acting economically (max u(x) s.t c

TCP/IP - no-one got rich, went broke.

NFS - from Sun, well managed standard, set free, but protected, Sun didn’t get rich off it

The IDE or SCSI busses - no idea who came up with these, but unlikely to have become MS or Netscape.

And, as someone said, all those standards out there that we use every day but never think about - standard gauge railways, standard tyre connections on car axles, standard nut & bolt sizes.

Standards typically come about because you have two complementary industries interconnecting - the car manufacturer wants to make sure any tyres can be put on his care, the tyre manufacturer wants to make sure the consumer can use his tyres with any car.

In the case of the web, the interchange is between web servers and web clients - but neither are really a good example of the type of competition you get among tool-makers or bathroom fitting manufacturers. For software, there isn’t the healthy competition of several operating systems, so all the manufacturers just make sure they work with the most used one. If there were 10 competing OSes, we would see a lot more standards in how hardware interracts with the operating system, because neither OS developers nor hardware manufacturers would want to multiply their efforts to support all hardware.

In the first category, there are plenty of examples of relatively open and free standards that worked well. But I assume that Luis is more interested in the second category.

Maybe the GIF format could be a good example? Promoted by a single company (CompuServe) before becoming so widespread (if we ignore the Unisys patent issues).

In practise these tend to be a small group of experts from a group of interested parties who get together to try and make life easier for themselves. 90% of the time the standard disappears into oblivion - usually because the standard doesn’t actually make life easier for anybody.

It’s not exactly an entrepreneurial system, and that shows at times, but when everyone actually works towards a common goal (rather than e.g. trying to make sure their IP is mandated) it seems to work out.

Check out metalink (XML based) for file distribution. It’s not widely deployed yet, but there are about 6 programs that support it so far.