Internet Security, Vulnerability Disclosure and Software Provision

Chaim Fershtman (), Neil Gandal and Jay Choi

No 5269, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper, we examine how software vulnerabilities affect firms that license software and consumers that purchase software. In particular, we model three decisions of the firm: (i) an upfront investment in the quality of the software to reduce potential vulnerabilities; (ii) a policy decision whether to announce vulnerabilities; and (iii) a price for the software. We also model two decisions of the consumer: (i) whether to purchase the software; and (ii) whether to apply a patch.

Keywords: Internet security; Vulnerabilities; Software; Network effects (search for similar items in EconPapers)
JEL-codes: L86 O3 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-ino and nep-net
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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