EconPapers    
Economics at your fingertips  
 

Preemption Games with Private Information

Hugo A. Hopenhayn and Francesco Squintani ()

The Review of Economic Studies, 2011, vol. 78, issue 2, 667-692

Abstract: Preemption games are widely used to model economic problems such as patent races. We introduce private information into these games and allow for this information to stochastically change over time. This reflects, e.g. how R&D competitors improve their innovations over time and keep these innovations secret before patenting them. The analysis initially appears intractable because of the complexity of the equilibrium updating of beliefs on opponents' information. However, we demonstrate the existence of a class of equilibria and calculate these equilibria in closed form. We find that the expected durations in these equilibria are longer than when players' information is public but, in some cases, shorter than in the collusive outcome. Hence, R&D secrecy slows down innovation disclosure. Copyright 2011, Oxford University Press.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (44)

Downloads: (external link)
http://hdl.handle.net/10.1093/restud/rdq021 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Preemption Games with Private Information (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:78:y:2011:i:2:p:667-692

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2025-03-31
Handle: RePEc:oup:restud:v:78:y:2011:i:2:p:667-692