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Research Note--Sell First, Fix Later: Impact of Patching on Software Quality

Author

Listed:
  • Ashish Arora

    () (H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, Pennsylvania 15213)

  • Jonathan P. Caulkins

    () (H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, Pennsylvania 15213)

  • Rahul Telang

    () (H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, Pennsylvania 15213)

Abstract

We present a model of fixing or patching a software problem after the product has been released in the market. Specifically, we model a software firm's trade-off in releasing a buggy product early and investments in fixing it later. Just as the marginal cost of producing software can be effectively zero, so can the marginal cost of repairing multiple copies of defective software by issuing patches. We show that due to the fixed cost nature of investments in patching, a software vendor has incentives to release a buggier product early and patch it later in a larger market. Thus, a software monopolist releases a product with fewer bugs but later than what is socially optimal. We contrast this result with physical good markets where market size does not play any role in quality provision. We also show that for comparable costs, a software monopolist releases the product with more bugs but invests more in post-patching support later than the physical good monopolist.

Suggested Citation

  • Ashish Arora & Jonathan P. Caulkins & Rahul Telang, 2006. "Research Note--Sell First, Fix Later: Impact of Patching on Software Quality," Management Science, INFORMS, vol. 52(3), pages 465-471, March.
  • Handle: RePEc:inm:ormnsc:v:52:y:2006:i:3:p:465-471
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    File URL: http://dx.doi.org/10.1287/mnsc.1050.0440
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    References listed on IDEAS

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    1. M. S. Krishnan & C. H. Kriebel & Sunder Kekre & Tridas Mukhopadhyay, 2000. "An Empirical Analysis of Productivity and Quality in Software Products," Management Science, INFORMS, vol. 46(6), pages 745-759, June.
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    3. Rajiv D. Banker & Sandra A. Slaughter, 1997. "A Field Study of Scale Economies in Software Maintenance," Management Science, INFORMS, vol. 43(12), pages 1709-1725, December.
    4. Billie Jo Zirger & Modesto A. Maidique, 1990. "A Model of New Product Development: An Empirical Test," Management Science, INFORMS, vol. 36(7), pages 867-883, July.
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    7. Morris A. Cohen & Jehoshua Eliasberg & Teck-Hua Ho, 1996. "New Product Development: The Performance and Time-to-Market Tradeoff," Management Science, INFORMS, vol. 42(2), pages 173-186, February.
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    Citations

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    Cited by:

    1. Laksana, Kamonkan & Hartman, Joseph C., 2010. "Planning product design refreshes with service contract and competition considerations," International Journal of Production Economics, Elsevier, vol. 126(2), pages 189-203, August.
    2. Arora, Ashish & Forman, Chris & Nandkumar, Anand & Telang, Rahul, 2010. "Competition and patching of security vulnerabilities: An empirical analysis," Information Economics and Policy, Elsevier, vol. 22(2), pages 164-177, May.
    3. Anshul Tickoo & P. K. Kapur & A. K. Shrivastava & Sunil K. Khatri, 2016. "Testing effort based modeling to determine optimal release and patching time of software," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 7(4), pages 427-434, December.
    4. Yogita Kansal & Gurinder Singh & Uday Kumar & P. K. Kapur, 2016. "Optimal release and patching time of software with warranty," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 7(4), pages 462-468, December.

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