Six Challenges in Platform Licensing and Open Innovation

This article describes six common challenges of design, incentives, and governance that arise in establishing platform businesses. It also proposes solutions. It considers, for example, how to open a platform to decentralized innovation yet still earn a return; how to incorporate best-of-breed innovations from different sources while avoiding problems of multi-party hold-up; and how to encourage sources of good ideas to contribute those ideas despite the risk of losing them to owners of indispensible complements. We express these issues and solutions as a reduced set of tradeoffs useful for managing information and technology property.licensing, open source, free software, dual licensing, platform, intellectual property.

Information Complements, Substitutes, and Strategic Product Design

Competitive maneuvering in the information economy has raised a pressing question: how can firms raise profits by giving away products for free? This paper provides a possible answer and articulates a strategy space for information product design. Free strategic complements can raise a firm's own profits while free strategic substitutes can lower profits for competitors. We introduce a formal model of cross-market externalities based in textbook economics -- a mix of Katz & Shapiro network effects, price discrimination, and product differention -- that leads to novel strategies such as an eagerness to enter into Bertrand price competition. This combination helps to explain many recent firm strategies such as those of Microsoft, Netscape (AOL), Sun, Adobe, and ID. We also introduce the concept of a ''content-creator'' who adds value for end-consumers but may not be paid directly. Similar to the case of product dumping, this research implies that both firms and policy makers need to consider complex market interactions to grasp information product design and profit maximization. The model presented here argues for three simple and intuitive results. First, a firm can rationally invest in a product it intends to give away into perpetuity even in the absence of competition. The reason is that increased demand in a complementary goods market more than covers the cost of investment in the free goods market. Second, we identify distinct markets for content-providers and end-consumers and show that either can be a candidate for the free good. The decision on which market to charge rests on the relative elasticities as governed by their network externality effects. If the externality effect is sufficiently great, the market with the higher elasticity is the market to subsidize with the free good. It is also possible to charge both markets but to keep one price artificially low. Importantly, the modeling contribution is distinct from tying in the sense that consumers need never purchase both goods -- unlike razors and blades, the products are stand-alone goods. It also differs from multi-market price discrimination in the sense that the firm may extract no consumer surplus from one of the two market segments, implying that this market would have previously gone un-served. Third, a firm can use strategic product design to penetrate a market that becomes competitive post-entry. The threat of entry is credible even in cases where it never recovers its sunk costs directly. The model therefore helps to explain several interesting market behaviors such as free goods, upgrade paths, split versioning, and strategic information substitutes.http://deepblue.lib.umich.edu/bitstream/2027.42/39683/3/wp299.pd

The Greatest gift an education gives is perspective

Commencement address given by Geoffrey Parker, Professor of History, to the Winter 2003 graduating class of The Ohio State University, St. John Arena, Columbus, Ohio, March 21, 2003

Guerra, clima y catástrofe: una reconsideración de la crisis general del siglo XVII y de la decadencia de España

Las décadas centrales del siglo XVII son únicas en la historia del mundo por cuatro aspectos distintos. En primer lugar, presenciaron más casos de descomposición simultánea de estados a lo largo y ancho del globo que ninguna época anterior o posterior, un fenómeno que los historiadores han denominado “la crisis general”. En una sola década, los años de 1640, la China de la dinastía Ming, el estado más populoso del mundo, se desmoronó y la Unión Polaca-Lituana, el estado más extenso de Europa, se desintegró. En el mundo atlántico, toda la Monarquía Estuardo se rebeló y la Monarquía Hispánica experimentó revoluciones en Cataluña, Sicilia, Nápoles y, sobre todo, Portugal y todo su imperio

Lope de Vega Really Did Embark on the Spanish Armada

«A perplexing lacuna in the story of Lope's life is the year 1588» wrote Rudolf Schevill in 1941. He found particularly perplexing the question of whether or not El Fénix sailed with the Spanish Armada. In 2015, RTVE attempted to fill this lacuna in episode 2 of their series El ministerio del tiempo. Using Fax, Skype and an Internet search, the "ministry" checks the embarkation lists of the Armada and is horrified to find that Lope de Vega has embarked on San Esteban, a ship that will be wrecked in Ireland, where the whole ship's company will die. The "ministry" manages to move him to San Juan de Portugal, but only «a última hora» because «Las listas de tripulación nos llegan a última hora». The scriptwriters came surprisingly close to the truth.Rudolph Schevill escribió en 1941: «a perplexing lacuna in the story of Lope's life is the year 1588». Le parecía particularmente sorprendente la pregunta de si El Fénix se embarcó o no en la Armada Invencible. En 2015, RTVE trató de rellenar esa laguna en el capítulo 2 de la serie El ministerio del tiempo. Usando el fax, Skype y una búsqueda en internet, el "ministerio" comprueba la lista de embarcaciones de la Armada y se alarma al descubrir que Lope de Vega ha embarcado en el San Esteban, un barco que naufragará en Irlanda, donde toda la tripulación morirá. El "ministerio" consigue movelro al San Juan de Portugal, pero solo «a última hora» porque «las listas de tripulación nos llegan a última hora». Los guionistas estaban sorprendentemente cerca de la verdad

Information Complements, Substitutes, and Strategic Product Design

Competitive maneuvering in the information economy has raised a pressing question: how can firms raise profits by giving away products for free? This paper provides a possible answer and articulates a strategy space for information product design. Free strategic complements can raise a firm's own profits while free strategic substitutes can lower profits for competitors. We introduce a formal model of cross-market externalities based in textbook economics -- a mix of Katz & Shapiro network effects, price discrimination, and product differention -- that leads to novel strategies such as an eagerness to enter into Bertrand price competition. This combination helps to explain many recent firm strategies such as those of Microsoft, Netscape (AOL), Sun, Adobe, and ID. We also introduce the concept of a ''content-creator'' who adds value for end-consumers but may not be paid directly. Similar to the case of product dumping, this research implies that both firms and policy makers need to consider complex market interactions to grasp information product design and profit maximization. The model presented here argues for three simple and intuitive results. First, a firm can rationally invest in a product it intends to give away into perpetuity even in the absence of competition. The reason is that increased demand in a complementary goods market more than covers the cost of investment in the free goods market. Second, we identify distinct markets for content-providers and end-consumers and show that either can be a candidate for the free good. The decision on which market to charge rests on the relative elasticities as governed by their network externality effects. If the externality effect is sufficiently great, the market with the higher elasticity is the market to subsidize with the free good. It is also possible to charge both markets but to keep one price artificially low. Importantly, the modeling contribution is distinct from tying in the sense that consumers need never purchase both goods -- unlike razors and blades, the products are stand-alone goods. It also differs from multi-market price discrimination in the sense that the firm may extract no consumer surplus from one of the two market segments, implying that this market would have previously gone un-served. Third, a firm can use strategic product design to penetrate a market that becomes competitive post-entry. The threat of entry is credible even in cases where it never recovers its sunk costs directly. The model therefore helps to explain several interesting market behaviors such as free goods, upgrade paths, split versioning, and strategic information substitutes.