Strategic Concealment in Innovation Races

Yonggyun Kim () and Francisco Poggi ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Firms racing to innovate often make interim breakthroughs that speed up, but are not necessary for, the final innovation. When such a breakthrough is privately acquired, a firm can disclose it by filing a patent, or conceal it. This paper studies how this trade off is shaped by the race structure and the intellectual property system. We develop a dynamic model where firms allocate resources between developing with an existing technology and researching a faster one. We show that firms strategically conceal their breakthroughs when the prize for winning is large and the prior-use defense is strong, impeding knowledge spillovers and slowing the pace of innovation.

Keywords: Interim Technology; Patents; License; Prior-use Defense; Direction of In novation (search for similar items in EconPapers)
JEL-codes: C73 D21 O30 (search for similar items in EconPapers)
Pages: 67
Date: 2025-02, Revised 2026-09
New Economics Papers: this item is included in nep-cse, nep-ipr, nep-mic and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2025_648v2

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