OPTIMAL DISCLOSURE DELAY IN MULTISTAGE R-AND-D COMPETITION

This paper analyzes the effects of a policy of disclosure with delay o n the speed of discovery and incentives to invest in a multi-stage pat ent race. Depending on the parameters, four equilibrium configurations are obtained. In the first, a single firm acts as a monopolist. In th e second, a single firm invests at the initial stages, but the second firm joins the race after the disclosure of the intermediate product. In the third, both firms invest when they have equal knowledge, but on ly the leader invests before the disclosure of the intermediate produc t. In the last configuration, firms always compete, except when the di sclosure date is close. The determination of the optimal disclosure de lay involves a trade-off between the incentives to invest and the expe cted time of discovery of the final product.