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The Effects of Disclosure Regulation of an Innovative Firm

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  • Jos Jansen

Abstract

Firms in an R&D race actively manage rivals’ beliefs by disclosing and concealinginformation on their cost of investment. The firms’ disclosure strategies affect theirincentives to invest in R&D, and to acquire information. We compare equilibria undervoluntary disclosure with those under mandatory disclosure in a model where the firms’cost of investment are identically independently distributed. Under voluntary disclosurefirms conceal bad news, and disclose good news only if little knowledge spills over totheir rival. Under mandatory disclosure firms expect higher profits for giveninformation acquisition investments, but they may acquire less information. ZUSAMMENFASSUNG - (Die Wirkung von Offenlegungsvorschriften auf innovative Firmen: Unkorrelierte Werte) Unternehmen, welche an einem F&E -Wettbewerb teilnehmen, managen aktiv die Erwartungen ihrer Konkurrenten, in dem sie gezielt entscheiden, ob sie Informationen über ihre Investitionskosten veröffentlichen oder geheim halten. Durch ihre Offenlegungsstrategien beeinflussen sie sowohl die Anreize Ihrer Konkurrenten Informationen zu sammeln, wie auch deren Anreize, F&E zu betreiben. Anhand eines Modells, in dem die Investitionskosten der Unternehmen unabhängig verteilt sind, vergleicht der Beitrag Gleichgewichte in denen die Unternehmen freiwillig wählen, ob sie ihre Informationen offen legen wollen, mit den Gleichgewichten, bei denen Unternehmen ihre Information offen legen müssen. Können die Unternehmen selbstständig entscheiden, ob sie ihre Informationen offen legen wollen, so führt dies dazu, dass sie schlechte Nachrichten verbergen und gute Nachrichten nur dann veröffentlichen, wenn wenig ihres Wissens von den Konkurrenten genutzt werden kann. Sind die Unternehmen jedoch verpflichtet ihre Informationen offenzulegen, so erwarten sie einerseits höhere Profite für gegebene Informationsinvestitionen, aber investieren andererseits u.U. weniger in die Informationsbeschaffung.

Suggested Citation

  • Jos Jansen, 2002. "The Effects of Disclosure Regulation of an Innovative Firm," CIG Working Papers FS IV 02-05, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  • Handle: RePEc:wzb:wzebiv:fsiv02-05
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    Keywords

    R&D Competition; Disclosure Regulation; Knowledge Spillovers;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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