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Competition and patching of security vulnerabilities: An empirical analysis

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  • Arora, Ashish
  • Forman, Chris
  • Nandkumar, Anand
  • Telang, Rahul

Abstract

We empirically estimate the effect of competition on vendor patching of software defects by exploiting variation in number of vendors that share a common flaw or common vulnerabilities. We distinguish between two effects: the direct competition effect when vendors in the same market share a vulnerability, and the indirect effect, which operates through non-rivals that operate in different markets but nonetheless share the same vulnerability. Using time to patch as our measure of quality, we find empirical support for both direct and indirect effects of competition. Our results show that ex-post product quality in software markets is not only conditioned by rivals that operate in the same product market, but by also non-rivals that share the same common flaw.

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Bibliographic Info

Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 22 (2010)
Issue (Month): 2 (May)
Pages: 164-177

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Handle: RePEc:eee:iepoli:v:22:y:2010:i:2:p:164-177

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Web page: http://www.elsevier.com/locate/inca/505549

Related research

Keywords: Information security Competition Software quality Vulnerabilities;

References

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  1. Donald E. Harter & Mayuram S. Krishnan & Sandra A. Slaughter, 2000. "Effects of Process Maturity on Quality, Cycle Time, and Effort in Software Product Development," Management Science, INFORMS, vol. 46(4), pages 451-466, April.
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  15. Timothy F. Bresnahan & Shane Greenstein, 1997. "Technological Competition and the Structure of the Computer Industry," Working Papers 97028, Stanford University, Department of Economics.
  16. Andrew Cohen & Michael J. Mazzeo, 2004. "Competition, product differentiation and quality provision: an empirical equilibrium analysis of bank branching decisions," Finance and Economics Discussion Series 2004-46, Board of Governors of the Federal Reserve System (U.S.).
  17. Rajiv D. Banker & Gordon B. Davis & Sandra A. Slaughter, 1998. "Software Development Practices, Software Complexity, and Software Maintenance Performance: A Field Study," Management Science, INFORMS, vol. 44(4), pages 433-450, April.
  18. Borenstein, Severin & Netz, Janet, 1999. "Why do all the flights leave at 8 am?: Competition and departure-time differentiation in airline markets," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 611-640, July.
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Cited by:
  1. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2009. "Price and quality in spatial competition," NIPE Working Papers 21/2009, NIPE - Universidade do Minho.

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