Open Team Production, the New Cooperative Firm, and Hybrid Advantage

Abstract

We critically assess the comparative efficiency advantages and disadvantages of capitalist and cooperative firms using team production as a frame of reference. We revisit the debate about such (dis)advantages in the context of open team production (OTP), a situation where team members are both internal and external to the firm. In contrast to the case of traditional (closed) team production, which focuses on the problem of monitoring team members within the firm, open team production, requires incentivizing both internal and external team members to commit to firm-specific cospecialized investments, as well as orchestrating and monitoring these continued investments. We identify some comparative efficiency (dis)advantages of traditional cooperative and capitalist firms in dealing with the novel challenges posed by OTP and we conclude that, in its context, a new type of a hybrid firm can possess comparative efficiency advantages vis-à-vis both types of traditional firms.