Peer production represents a mode of coordination of productive activity that is distinct from market- or firm-based coordination. Large projects must be divided, the parts assigned to many collaborators and reassembled into a functioning whole. A model of project modularity sheds some light on the division of labor in this context. A hierarchical version of the model shows that the optimal division of a project is one that distributes work equally between levels of the hierarchy. If participants are organized into hierarchical production teams, variations in their organizational structure have consequences for productivity, and different choices of structure are appropriate under different circumstances.

Open-source software is a key example of peer production. Certain characteristics of software make it amenable to such an approach. The specific institutions used by open-source projects allow the coordination of productive activity. Two testable versions of a key hypothesis regarding project design are supported empirically. A broader regression analysis indicates the significance of various other factors for project success.

Financial forwards and futures allow banks to align mismatched cash inflows and outflows arising from the activities of their clients in the real economy. Even with these contracts, however, banks can achieve only imperfect offsetting of cash flows, leaving them bearing residual liquidity risk. Banks charge a price for bearing this risk which is not directly measurable. Owing to the different cash-flow characteristics of the two types of contract, this liquidity-risk premium is embodied in the price difference between futures and forwards in interest rates and in foreign exchange. The premium can be measured indirectly from market data, and aids in an understanding of two asset-pricing anomalies of monetary economics.