In recent years, vendor liability for software security vulnerabilities has been the center of an important debate in the software community and a topic gaining government attention in legislative committees and hearings. The importance of this question surrounding vendor security liability is...

We study the effect of user incentives on software security in a network of individual users under costly patching and negative network security externalities. For proprietary software or freeware, we compare four alternative policies to manage network security: (i) consumer self-patching (where...