The disclosure decision game

This article presents a three-stage non-cooperative disclosure decision game (DDG), in which R&D-investing firms choose whether to disclose R&D-related information to the rival in a Cournot-like environment. Though firms have no (private) incentive to disclose information unilaterally on their cost-reducing R&D activity to prevent a rival from engaging in free appropriation, this work reveals opportunity for the government to design an optimal policy aimed at incentivising R&D disclosure. Following this welfare-improving path, sharing R&D-related information becomes a Pareto-efficient Nash equilibrium strategy. These findings suggest that using public subsidies to R&D disclosure can lead to a win-win result, eliminating the unpleasant non-disclosing outcome from a societal perspective

Appropriation · Business · Cournot competition · Deadweight loss · Economics · Full disclosure · Government (linguistics · Incentive · Microeconomics · Nash equilibrium · Outcome (game theory · Pareto principle · Private information retrieval · Public economics · Subsidy · Welfare · Computer Science · Economic Policies and Impacts · Innovation Policy and RD · Merger and Competition Analysis