Hopenhayn, H.;
Squintani, F.;
(2004)
Preemption games with private information.
(ELSE Working Papers
108).
ESRC Centre for Economic Learning and Social Evolution: London, UK.
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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 > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/14575 |
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