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Strategic Information Revelation and Revenue Sharing in an R&D Race

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  • Jos Jansen
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    Abstract

    Firms learn imperfectly about their cost of investment. We study how this information affects firms' incentives to invest in R&D by comparing investments and profits under public and private information. Revenue sharing between the winner and loser of the race, e.g. through licensing contracts, weakens the appropriability of the innovation's revenues, and creates free- rider effects. These free-rider effects not only soften R&D competition, but also affect the firms' incentives to acquire and reveal information. How much information firms eventually reveal, and consequently the information acquisition and innovation incentives, also depends on the verifiability of information. ZUSAMMENFASSUNG - (Die strategische Preisgabe von Informationen und Einnahmeaufteilungen in einem F&E- Wettrennen) Unternehmen können ihre F&E-Investitionskosten nicht perfekt beobachten. Wir untersuchen, wie Informationen über diese Kosten die Investitionsanreize von Unternehmen beeinflusst. Zu diesem Zweck vergleichen wir das Investitionsniveau und die Gewinne bei öffentlich verfügbaren Informationen mit den entsprechenden Werten bei privaten Informationen. Eine Aufteilung der Einnahmen zwischen dem Gewinner und dem Verlierer des Rennens, beispielsweise durch Lizenzverträge, schwächt die Möglichkeiten, sich die Einnahmen aus der Innovation anzueignen und schafft Trittbrettfahrereffekte. Die Trittbrettfahrereffekte mildern nicht nur den F&E- Wettbewerb sondern beeinflussen auch die Anreize des Unternehmens, Informationen zu beschaffen und offenzulegen. Die Menge der Informationen die sich die Unternehmen beschaffen, die letztendlich von den Unternehmen preisgeben werden und die Innovationsanreize hängen darüber hinaus von der Überprüfbarkeit der Informationen ab.

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    Bibliographic Info

    Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number FS IV 01-06.

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    Length: 48 pages
    Date of creation: Apr 2001
    Date of revision:
    Handle: RePEc:wzb:wzebiv:fsiv01-06

    Note: This is a revision of FS IV 99-11
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    Related research

    Keywords: R&D; Competition; Revelation; Information Acquisition; Revenue Sharing;

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