Competition, Innovation and Intellectual Property Rights in Software Markets
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.
Volume (Year): 1 (2009)
Issue (Month): 74 (2nd quarter)
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