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

Author

Listed:
  • Catherine Bobtcheff

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Raphaël Lévy

    (HEC Paris - Ecole des Hautes Etudes Commerciales)

  • Thomas Mariotti

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

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?," Post-Print hal-05475414, HAL.
    • Handle: RePEc:hal:journl:hal-05475414
    DOI: 10.1111/1756-2171.12492
    Note: View the original document on HAL open archive server: https://hal.science/hal-05475414v1
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    References listed on IDEAS

    as
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