Strategic Information Disclosure and Competition for an Imperfectly Protected Innovation
Department of Economics and Business; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods
MPI Collective Goods Preprint, No. 2009/6
The imperfect appropriability of revenues from innovation affects the incentives of firms to invest, and to disclose information about their innovative productivity. It creates a free-rider effect in the competition for the innovation that countervails the familiar business-stealing effect. Moreover, it affects the disclosure incentives such that full disclosure emerges for extreme revenue spillovers (e.g., full protection and no protection of intellectual property), but either partial disclosure or full concealment emerges for intermediate spillovers. I analyze the implications of imperfect appropriability and strategic disclosure for the firms' profits and the probability of innovation.
Number of Pages in PDF File: 38
Keywords: externality, free-rider effect, information disclosure, Innovation, R&D competition, spillovers, strategic substitutes
JEL Classification: D82, D83, L23, O31, O32working papers series
Date posted: March 13, 2009
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo1 in 0.391 seconds