Template-Type: ReDIF-Paper 1.0
Title: Strategic Concealment in Innovation Races
Author-Name: Yonggyun Kim
Author-Email: ykim22@fsu.edu
Author-Name: Francisco Poggi
Author-Email: poggi@uni-mannheim.de
Classification-JEL: C73, D21, O30
Keywords: Direction of Innovation, Patent, License, Trade Secret

Abstract: We introduce a dynamic innovation game where participants race to develop a product
using alternative technologies. Race participants dynamically allocate resources
across (i) developing the product with the currently available technology and (ii) obtaining
a faster technology for posterior development. When firm’s available technologies
are publicly observable, there is a unique MPE in which firms react to a rivals’
technological discovery by increasing the share of resources allocated to development.
However, without frictions, the firms file patents and license technologies to their rivals.
When firm’s available technologies are private information, firms conceal their discoveries
by forgoing patenting, even when patent holders retain all bargaining power in
licensing negotiations.

Note: 
Length: 77
Creation-Date: 2025-02
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp648
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_648