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Information disclosure in preemption races:Blessing or (winner's) curse?

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  • Bobtcheff, Catherine
  • Mariotti, Thomas

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

  • Bobtcheff, Catherine & Mariotti, Thomas, 2021. "Information disclosure in preemption races:Blessing or (winner's) curse?," TSE Working Papers 21-1202, Toulouse School of Economics (TSE), revised 10 Feb 2025.
    • Handle: RePEc:tse:wpaper:125474
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    References listed on IDEAS

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    Cited by:

    1. Chen, Chia-Hui & Ishida, Junichiro & Mukherjee, Arijit, 2023. "Pioneer, early follower or late entrant: Entry dynamics with learning and market competition," European Economic Review, Elsevier, vol. 152(C).
    2. Wagner, Peter A. & Klein, Nicolas, 2022. "Strategic investment and learning with private information," Journal of Economic Theory, Elsevier, vol. 204(C).
    3. Hoppe-Wewetzer, Heidrun & Katsenos, Georgios & Ozdenoren, Emre, 2023. "The effects of rivalry on scientific progress under public vs private learning," Journal of Economic Theory, Elsevier, vol. 212(C).
    4. Bergemann, Dirk & Ottaviani, Marco, 2021. "Information Markets and Nonmarkets," CEPR Discussion Papers 16459, C.E.P.R. Discussion Papers.

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