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Trade Secrets and Information Sharing

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  • Thomas Rønde
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    Abstract

    If trade secrets are weakly protected by law, firms risk losing their valuable information when employees are hired by competitors. It may therefore be optimal to limit the number of employees who share the trade secrets even if it reduces the firm's productive efficiency. The benefits of limited information sharing are greatest if the efficiency cost is low and the competition in the market is neither very tough nor very weak. It is shown that it is more profitable to reduce the information sharing by giving the employees different information than by giving some employees more information than others. Copyright (c) 2001 Massachusetts Institute of Technology.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.

    Volume (Year): 10 (2001)
    Issue (Month): 3 (09)
    Pages: 391-417

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    Handle: RePEc:bla:jemstr:v:10:y:2001:i:3:p:391-417

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    Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/

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    Cited by:
    1. Motta, Massimo & Rønde, Thomas, 2002. "Trade secret laws, labor mobility, and innovations," Working Papers 08-2002, Copenhagen Business School, Department of Economics.
    2. Bouckaert, J.M.C. & Degryse, H.A., 2002. "Softening Competition by Enhancing entry: An Example from the Banking Industry," Discussion Paper 2002-86, Tilburg University, Center for Economic Research.
    3. Fosfuri, Andrea & Rønde, Thomas, 2002. "High-tech clusters, technology spillovers, and trade secret laws," Working Papers 07-2002, Copenhagen Business School, Department of Economics.

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