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Six Challenges in Platform Licensing and Open Innovation

Author

Listed:
  • Geoffrey PARKER

    (Tulane University and Boston University / MIT)

  • Marshall VAN ALSTYNE

    (Tulane University and Boston University / MIT)

Abstract

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.

Suggested Citation

  • Geoffrey PARKER & Marshall VAN ALSTYNE, 2009. "Six Challenges in Platform Licensing and Open Innovation," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(74), pages 17-36, 2nd quart.
    • Handle: RePEc:idt:journl:cs7401
    as

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    File URL: http://repec.idate.org/RePEc/idt/journl/CS7401/CS74_PARKER_VAN_ALSTYNE.pdf
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    References listed on IDEAS

    as
    1. Greenstein,Shane & Stango,Victor (ed.), 2006. "Standards and Public Policy," Cambridge Books, Cambridge University Press, number 9780521864503, October.
    2. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Edward G. Anderson & Geoffrey G. Parker & Burcu Tan, 2014. "Platform Performance Investment in the Presence of Network Externalities," Information Systems Research, INFORMS, vol. 25(1), pages 152-172, March.
    2. Geoffrey Parker & Marshall Van Alstyne, 2018. "Innovation, Openness, and Platform Control," Management Science, INFORMS, vol. 64(7), pages 3015-3032, July.
    3. Benedict J. Drasch & Gilbert Fridgen & Tobias Manner-Romberg & Fenja M. Nolting & Sven Radszuwill, 2020. "The token’s secret: the two-faced financial incentive of the token economy," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(3), pages 557-567, September.
    4. Shrutika Mishra & A. R. Triptahi, 2020. "Platforms oriented business and data analytics in digital ecosystem," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-16, February.
    5. Islam, Habib A. & Farrell, Matthew & Nair, Anil & Zhang, Jing, 2023. "Understanding transaction platform governance and conflicts: A configuration approach," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    6. Kimmo Karhu & Robin Gustafsson & Kalle Lyytinen, 2018. "Exploiting and Defending Open Digital Platforms with Boundary Resources: Android’s Five Platform Forks," Information Systems Research, INFORMS, vol. 29(2), pages 479-497, June.
    7. Burcu Tan & Edward G. Anderson, Jr. & Geoffrey G. Parker, 2020. "Platform Pricing and Investment to Drive Third-Party Value Creation in Two-Sided Networks," Information Systems Research, INFORMS, vol. 31(1), pages 217-239, March.

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    More about this item

    Keywords

    licensing; open source; free software; dual licensing; platform; intellectual property.;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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