Is there peer reviewed evidence that open source production processes increase efficiency and/or consumer surplus? It seems that the first theorem of welfare economics requires complete markets which requires that all actors have perfect information. Yet, producers zealously seek to keep their own production processes secret rather than public.
- For example, Soda Co. has an unpatented secret recipe at time $t_0$ that sells in the market. Are there economists who argue that if Soda Co. must patent and publicly reveal the secret recipe at time $t_x$, efficiency and/or consumer surplus would increase in comparison to current economy?
If not, are there good economic reasons why economic regulation does not require all suppliers to publicly reveal secret recipes, i.e., all information about the production process that would allow other producers to compete in production of the identical product (whether that be Soda Co.'s management techniques, scheduling practices, shipping arrangements, leasing terms, model number of vats, speed of conveyor belts, actual secret recipe for a beverage, etc.)? That is to say, are there good economic reasons that secrets anywhere in the entire production process are not simply barriers to entry?
Maybe Drink Co. can produce and sell Soda Co.'s recipe for 0.01 less than Soda Co. after they clone Soda Co.'s land, labor, capital, entrepreneurship, and recipe due to one tweak? Maybe consumers will only pay 0.10 less after they possess perfect information on how Soda Co. produces the beverage?