Competition, Innovation and Intellectual Property Rights in Software Markets

Michiel Bijlsma, Paul de Bijl and Viktoria Kocsis
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Michiel Bijlsma: CPB Netherlands Bureau for Economic Policy Analysis, the Netherlands

Communications & Strategies, 2009, vol. 1, issue 74, 55-74

Abstract: 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. (search for similar items in EconPapers)
JEL-codes: L86 O31 O38 O4 R53 (search for similar items in EconPapers)
Date: 2009
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