Four Theories of the Innovation Commons

Abstract

This chapter proposes four theories explaining how innovation commons work, in terms of how they pool information, and what specific problems they solve in order to discover entrepreneurial opportunities. The first is the “two commons” theory in which the innovation commons is a screening mechanism by having the truly valuable commons of entrepreneurial information accessed only through the commons of technological knowledge and material innovation resources. The second is the “evolution of cooperation” theory, which draws on modern evolutionary theory (specifically multilevel selection theory and evolutionary game theory). The third is the “defense against enclosure” theory, in which the commons is a preferred institution for first movers because it raises the cost of alternative institutions and minimizes the risk of loss of control of the technology. The fourth is the “institutional uncertainty and real options” theory.