The Virtual Cathedral and the Virtual Bazaar

DATABASE for Advances in Information Systems, Vol. 38, No. 4, pp. 33-39, November 2007

7 Pages Posted: 12 Nov 2007

See all articles by Reina Y. Arakji

Reina Y. Arakji

City University of New York - Paul H. Chook Department of Information Systems & Statistics

Karl Reiner Lang

City University of New York - Paul H. Chook Department of Information Systems & Statistics

Abstract

Applying economic analysis, we explore the potential benefits and risks associated with firm-based and social production models and derive conditions that determine when open or closed innovation models are more appropriate. We contrast the newly emerging "user-generated approach" to innovation in virtual worlds with the traditional "producer-controlled approach". Taking the cases of World of Warcraft and Second Life, we show how the two virtual world providers use very different strategies to organize the creation of game content. We conclude with presenting a roadmap that businesses can use to conceive effective innovation and development strategies for designing virtual world offerings.

Keywords: Digital Entertainment, Innovation, Non-Market Collaboration, Outsourcing, Peer Production, Producer-Consumer Collaboration, Social Production, Theory of the Firm, User-Generated Content, Virtual Worlds

JEL Classification: D23, L11, L14, L15, L22, O32

Suggested Citation

Arakji, Reina Y. and Lang, Karl Reiner, The Virtual Cathedral and the Virtual Bazaar. DATABASE for Advances in Information Systems, Vol. 38, No. 4, pp. 33-39, November 2007. Available at SSRN: https://ssrn.com/abstract=1028945

Reina Y. Arakji (Contact Author)

City University of New York - Paul H. Chook Department of Information Systems & Statistics ( email )

17 Lexington Avenue
New York, NY 10010
United States

Karl Reiner Lang

City University of New York - Paul H. Chook Department of Information Systems & Statistics ( email )

17 Lexington Avenue
New York, NY 10010
United States
646-312-3370 (Phone)
646-312-3351 (Fax)

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