A knowledge market is a mechanism for distributing knowledge resources. There are two views on knowledge and how knowledge markets can function. One view uses a legal construct of intellectual property to make knowledge a typical scarce resource, so the traditional commodity market mechanism can be applied directly to distribute it.
An alternative model is based on treating knowledge as a public good and hence encouraging free sharing of knowledge. This is often referred to as attention economy. Currently there is no consensus among researchers on relative merits of these two approaches.
A knowledge economy include the concept of exchanging knowledge-based products and services. However, knowledge is very different from physical products. For example, it can be in more than one place at one time, selling it does not diminish the supply, buyers only purchase it once, and once sold, it cannot be recalled. Further, knowledge begets more knowledge in a never-ending cycle. Understanding of knowledge markets is beginning to emerge. As would be expected, they are very different in form from traditional markets. Knowledge markets have been variously described as a mechanism for enabling, supporting, and facilitating the mobilization, sharing, or exchange of information and knowledge among providers and users. This transactional approach assumes that knowledge-based products or services are available for distribution, that someone wants to use them, and that the primary focus of the market is to connect the two.
This perspective is appropriate when the market has limited or no interest or control over either the production or use of the content being exchanged, as is the case for most traditional markets. A provider-user perspective is also appropriate for emerging social networking ‘ideagoras’ (places on the Internet where large numbers of people or businesses gather to exchange ideas and solutions). From a production perspective, processes for creating wealth through the use of intellectual capital are explained by Nonaka (1991). At the marketing end of the spectrum, a number of authors, including Bishop (1996), describe the architecture and processes necessary to succeed in a digital economy.
Knowledge markets may also be sequential in nature. Simard (2006) describes a cyclic end-to-end knowledge-market model comprising nine stages that embed, advance, or extract value into knowledge products and services along a knowledge services value chain. The first five stages are internal to a knowledge organization (production and transfer) while the last four stages are external (intermediaries, clients, and citizens). Because the value chain is cyclic, it can be used to model either a supply (post-production evaluation ) or a demand (pre-production evaluation) approach to knowledge markets. Knowledge services are programs that provide content-based (data, information, knowledge) organizational outputs (e.g., advice, answers, facilitation), to meet external user wants or needs. Knowledge services are delivered through knowledge markets.
There are four types of knowledge services: generate content, develop products, provide assistance, and share solutions. The nine stages of the value chain are: generate, transform, manage, use internally, transfer, enhance, use professionally, use personally, and evaluate. Simard described a rich to reach service delivery spectrum that is segmented into categories of recipients, with associated levels of distribution, interactions, content complexity, and channels. The categories, from rich to reach, are: unique (once only), complex (science), technical (engineering), specialized (professional), simplified (popular), and mandatory (everyone).
From the perspective of knowledge markets, Mcgee and Prusak (1993) note that people barter for information, use it as an instrument of power, or trade it for information of greater value. Davenport and Prusak (1998) used a knowledge marketplace analogy to describe the exchange of knowledge among individuals and groups. However, Shapiro and Varian (1999) indicate that information markets will not resemble textbook competitive markets with many suppliers offering similar products but lacking the ability to influence prices.
Fee-based knowledge markets commoditize knowledge by being based on traditional market mechanisms that work well for traditional goods. The buyer posts a request, normally in the form of a question and sets a price for the valid answer. Alternatively, the suppliers of knowledge (answerers) can post their bids to have the question answered. ‘Experts-Exchange’ was the first fee-based knowledge markets using a virtual currency. It provided a marketplace where buyers could offer payment to have their questions answered. ‘NineSigma’ and ‘Innocentive’ are web-based open innovation marketplaces. Firms post scientific problems and a choose rewards. Google Answers was another implementation of this idea. This service allowed its users to offer bounties to expert researchers for answering their questions. The Google site was closed in 2006. Two months later, fifty former Google Answers Researchers launched paid research/Q&A site ‘Uclue.’ Google also acquired Q&A website ‘Vark.com,’ to shut it down a year later. ‘Mahalo Answers,’ a product extension of the people powered search engine ‘Mahalo.com,’ launched in 2008. Users may ask questions for free or provide a monetary reward, or tip, in the form of Mahalo Dollars, the site’s proprietary currency.
Several free knowledge markets use an alternative model, treating knowledge as a public good: ‘Quora,’ ‘Stack Overflow,’ ‘Ask Metafilter,’ ‘Yahoo Answers,’ ‘Windows Live QnA,’ ‘Wikipedia’s Reference Desk,’ and several other websites currently use the free knowledge exchange model. None of these offer more than an increase in reputation as payment for researchers. ‘ChaCha.com’ and ‘Answerly.com’ both offer subsidized knowledge markets where researchers are paid to generate answers despite the service remaining free to the question asker. Amazon.com’s ‘NowNow’ previously offered a subsidized knowledge market for questions asked through mobile phones and as an experimental feature in the company’s ebook reader, the Amazon Kindle. The ‘NowNow’ service was discontinued in 2008 after an extended private beta period.
The Daily Omnivore 
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