Hopenhayn, H. and Squintani, F. (2004) Preemption games with private information. (ELSE Working Papers 108). ESRC Centre for Economic Learning and Social Evolution: London, UK.
![[img]](/style/images/fileicons/application_pdf.png)
| PDF - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader 248Kb |
Abstract
Preemption games are widely used to model patent races, innovation adoption and market entry problems. A previously neglected feature of these problems is that the agents states (e.g. R&D firms' technological improvements) are kept secret and stochastically change over time. We fully characterize equilibrium in preemption games where private information evolves according to Poisson processes, and provide a strategic rationale for the common wisdom that big things happen fast. In the context of patent races we surprisingly find that strengthening patent rights need not increase innovation disclosure. Furthermore, we clarify a basic welfare trade off between duplication costs and preemption: the former likely take place in early stages of the race, and preemption in later stages.
| Type: | Working / discussion paper |
|---|---|
| Title: | Preemption games with private information |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php |
| Language: | English |
| Keywords: | JEL classification: C73, D82. Timing games, patent races, private information |
| UCL classification: | UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics |
View download statistics for this itemArchive Staff Only: edit this record