Revealing Private Information in a Patent Race

CERGE-EI Working Paper Series No. 693

60 Pages Posted: 24 Jul 2021

See all articles by Pavel Kocourek

Pavel Kocourek

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Date Written: July 1, 2021

Abstract

In this paper I investigate the role of private information in a patent race. Since firms often do their research in secrecy, the common assumption in patent race literature that firms know each other’s position in the race is questionable. I analyze how the dynamics of the game changes when a firm’s progress is its private information, and I address the question whether revealing it might be to a firm’s advantage. I find that a firm has an incentive to reveal its breakthrough only if its rival has not done so, and only if the research is costly.

Keywords: Patent Race, R&D Investment, Race, Optimal Effort, Revealing Private Information

JEL Classification: None

Suggested Citation

Kocourek, Pavel, Revealing Private Information in a Patent Race (July 1, 2021). CERGE-EI Working Paper Series No. 693, Available at SSRN: https://ssrn.com/abstract=3890900 or http://dx.doi.org/10.2139/ssrn.3890900

Pavel Kocourek (Contact Author)

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

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