Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242484 
Year of Publication: 
2021
Series/Report no.: 
GLO Discussion Paper No. 940
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
This research contributes to the theory of cost-reducing R&D investments by offering a tractable three-stage non-cooperative Cournot duopoly game in which R&D-investing firms choose whether to disclose R&D-related information to the rival. Though in a noncooperative context firms have no incentive to unilaterally disclose information on their costreducing R&D activity to prevent the rival from freely appropriate it, this work shows that there is room for the government to design an optimal policy aimed at incentivising unilaterally each owner towards R&D disclosure. Under this welfare improving policy, sharing R&D-related information becomes a Pareto efficient Nash equilibrium strategy of selfish firms. These findings suggest that introducing public subsidies aimed at favouring R&D disclosure represents a win-win result, eliminating the so far established - and unpleasant for both firms and society - non-disclosing outcome.
Subjects: 
Cost-reducing innovation
Nash equilibrium
Government
Social welfare
JEL: 
D43
L13
O31
Document Type: 
Working Paper

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