Competition and Patching of Security Vulnerabilities: An Empirical Analysis
By Anand Nandkumar, Ashish Arora, Chris Forman, Rahul Telang
Information Economics and Policy | May 2010
DOI
http://www.sciencedirect.com/science/journal/01676245
Citation
Nandkumar, Anand., Arora, Ashish., Forman, Chris., Telang, Rahul. Competition and Patching of Security Vulnerabilities: An Empirical Analysis Information Economics and Policy http://www.sciencedirect.com/science/journal/01676245.
Copyright
Information Economics and Policy, 2010
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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.

Anand Nandkumar is an Associate Professor of Strategy, Executive Director of SRITNE at the Indian School of Business (ISB), and Associate Dean of the Centre for Learning and Teaching Excellence. He explores industry and firm-level phenomena that influence innovation - the generation of new ideas, and entrepreneurship - distribution and commercialisation of new ideas. His research focuses on high-technology industries such as pharmaceuticals, biotechnology, and software, and it falls in between industrial organisation (IO), economics of technological change, and strategy.

Professor Nandkumar’s current work in the innovation stream examines the effect of stronger intellectual property rights (IPR) on different aspects of innovation, such as the influence of stronger patents on long run incentives for innovation or the influence of stronger patents on the functioning of Markets for Technology (MFT). In the entrepreneurship stream, his current work examines the influence of venture capitalists on entrepreneurial performance.

Professor Nandkumar graduated with a PhD in Public Policy and Management, with a focus in strategy and entrepreneurship from Carnegie Mellon University in 2008. Prior to his PhD, he worked for 3 years with a startup in Silicon Valley, and prior to that, in New York City with one of the world’s largest financial services firms.

True to his expertise, at ISB, Professor Nandkumar teaches Strategic Innovation Management and Strategic Challenges for Innovation-based startups.

Anand Nandkumar
Anand Nandkumar