PR#7 Governance.

Keugier move to add coffee scanner only angry the community. Three fundamental rules of governance.

• always create value for the customer you serve
• don’t use power to change the rule in your favour.
• don’t take more than fair share of wealth.

WHY governance matters!
The goal of governance to create the wealth fairly distributated among all those who created value. But when various member create the value for each other it makes likely that conflict will emerge. Governance rule must resolve them fairly and effectively.

In free market with no rules, resrtiction or safeguard can’t rely to produce fair and satisfactory result to those involved.

The four main cause of market failure -

• information asymmetry, it arises when one party knows the facts that other don’t and use to for personal advantage.
• externalities, when cost or benift occur to someone not in interaction, exchanging your phone for a point. Or Netflix movie recommandation.
• monopoly, when one supplier becomes powerful in a system and use that power to demand higher price or special power. Zynga.
• risk, something unexpected and unpredictable go wrong.

TOOL FOR GOVERNANCE, LAW, NORMS, ARCHITECTURE, MARKET.
Alvin Roth Model -

• saftey, well design market increase the saftey by transpercny, quality or insurance.
• maximise thinkness, which allow different side of market to find each other.
• minimise congestion, when too many people participate. Low quality drives high.
• repugnant activity, child labor on upwork.

The four tools of governance,

• Law, ban cigarette to minor or public area. Apple allow to share 6 device. Submit code to review. Earning point of stackoverflow and rights. Give fast, open feedback when applying law to good, slow, opeque when punish.
• Norms, social pressure, and making it uncool. Crowd curation on istock. Behaviour design by trigger, action, reward, investement. Clear boundaries delineate who is and isnot entitled for benifts. As the community grow governance should be structure in nested tiers. Local to formerly global.
• Architecture, air filters, smokeless device. In the world of platform that is self-improving software system. Loan software. Removing arbitrageurs. Removing advantage as super computers.
• Market, taxing taboo. Govern behaviour Through incentive or non-tangible like social currency. SAP social and monetary currency.

PRINCIPLE OF SELF GOVERNANCE FOR PLATFORM.

• First rule is, The rules apply to internal company themselves as well as partner and participants. Amazon service infrastructure.
• second rule, participation. Giving external partners and stakeholder a voice in internal decision process. USB.