Competition, Innovation and Intellectual Property Rights in Software Markets
Communications & Strategies, No. 74, p. 55, 2nd quarter 2009
20 Pages Posted: 27 Feb 2010
Date Written: June 1, 2009
This paper analyzes when it may be desirable for the government to stimulate open source software as a response to market failures in software markets. Our most important finding is that directly stimulating open source software, e.g. by acting as a lead customer, can improve dynamic efficiency if (i) there is a serious customer lock-in problem, while (ii) to develop the software, there is no need to purchase specific, complementary inputs at a substantial cost, and (iii) follow-on innovations are socially valuable but there are impediments to contractual agreements between developers that aim at realizing such innovations.
Keywords: software markets, intellectual property rights, open source software, public policy
JEL Classification: L86, R53, O31, O38, O4
Suggested Citation: Suggested Citation
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By Jyh-an Lee