When the design of an artifact is quot;modularized,quot; the elements of the design are split up and assigned to modules according to a formal architecture or plan. Some of the modules are quot;hidden,quot; meaning that design decisions in those modules do not affect decisions in other modules;...

This is the first of a series of papers that investigates the institutional forms that can arise and be sustained by a quot;technology of design.quot; This paper sets up our quot;model worldquot; in terms of its technology, actors and larger context. In subsequent papers, we will define three...

Every artifact has a design, and thus designs are an important class of information goods. In this paper, we establish the scope of the design valuation methodology based on real options, which we developed in Design Rules, Volume 1, The Power of Modularity (MIT Press, 2000). We argue that if an...

In this paper we develop a theory of patenting in which a firm preserves its reputation to only apply for a patent whenever a truly patentable idea has been generated. Firms have a short-run incentive to deviate and receive additional rents from unworthy pending patents, as well as potential...

This paper examines the impact of intellectual property rights (IPR) enforcement on multinationals’ choice of input suppliers and industry profits in a host economy. The framework consists of suppliers with heterogeneous capabilities who must engage in a relation-specific investment to...

This article presents the results of an analysis of the patent trading flows of small and large firms and the determinants of these firm's patent sale and acquisition decisions. We also examine whether these transactions lead to an excessive concentration of patent rights. We show that small...

We study the production of knowledge when many researchers or inventors are involved, in a setting where tensions can arise between individual public and private contributions. We first show that without some kind of coordination, production of the public knowledge good (science or research...

The economic characteristics of software and transaction costs explain, why closed source and open source software co-exist. It is about the efficient use of a non- and anti-scarce resource. But because of ex-post transaction costs that lead to information asymmetries, some property rights...

The rivalry between developers of open source and proprietary software encourages open source developers to court users and respond to their needs. If the open source developer wants to promote her own open source standard and solutions, she may choose liberal license terms such as those of the...