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To Reveal or Not to Reveal: Know-How Disclosure and Joint Ventures in Procurement Auctions

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  • Stephanie Rosenkranz

Abstract

Firm's incentives to form joint ventures are analyzed in an incomplete-information framework when technological know-how is private information. Firms first decide on cooperation and then compete in a second-price procurement auction. Provided that firms indicate their willingness to cooperate by revealing a fraction of their know-how, it can be shown that noncooperation is always an equilibrium. If spillovers are sufficiently low, cooperation can also occur in equilibrium. For intermediate levels of spillovers there exists an equilibrium in which only firms with low know-how cooperate.

Suggested Citation

  • Stephanie Rosenkranz, 2001. "To Reveal or Not to Reveal: Know-How Disclosure and Joint Ventures in Procurement Auctions," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(4), pages 555-567, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200112)157:4_555:trontr_2.0.tx_2-3
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    References listed on IDEAS

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    1. Anton, James J & Yao, Dennis A, 1994. "Expropriation and Inventions: Appropriable Rents in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 84(1), pages 190-209, March.
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    Cited by:

    1. Young-Ro Yoon, 2017. "Strategic Disclosure Of Meaningful Information To Rival," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 806-824, April.
    2. Damiano Silipo, 2005. "The Evolution of Cooperation in Patent Races:Theory and Experimental Evidence," Journal of Economics, Springer, vol. 85(1), pages 1-38, July.
    3. Young-Ro Yoon, 2008. "Strategic Disclosure of Valuable Information within Competitive Environments," CAEPR Working Papers 2008-022, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.

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    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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