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Information Disclosure in Preemption Races: Blessing or (Winner's) Curse?

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  • Catherine Bobtcheff
  • Raphaël Lévy
  • Thomas Mariotti

Abstract

Firms receiving independent signals on a common‐value risky project compete to be the first to invest. When firms are symmetric and competition is winner‐take‐all, rents are fully dissipated in equilibrium and the extent to which signals are publicly disclosed is irrelevant for welfare. When disclosure of signals is asymmetric, welfare is highest when firms are most asymmetric, and policies that uniformly promote disclosure may backfire, especially when competition is severe. When firms strategically select their disclosure policies, a moderate subsidy for disclosure induces a low correlation between firms' policies, and thus maximizes welfare.

Suggested Citation

  • Catherine Bobtcheff & Raphaël Lévy & Thomas Mariotti, 2025. "Information Disclosure in Preemption Races: Blessing or (Winner's) Curse?," RAND Journal of Economics, RAND Corporation, vol. 56(2), pages 145-162, June.
    • Handle: RePEc:bla:randje:v:56:y:2025:i:2:p:145-162
    DOI: 10.1111/1756-2171.12492
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