The disclosure decision game: Subsidies and incentives for R&D activity

This article presents a three-stage non-cooperative disclosure decision game (DDG), in which R & D investing firms choose whether to disclose R & D-related information to the rival in a Cournot-like environment. Though firms have no (private) incentive to disclose information unilaterally on their cost-reducing R & D activity to prevent a rival from engaging in free appropriation, this work reveals opportunity for the government to design an optimal policy aimed at incentivising R & D disclosure. Following this welfare-improving path, sharing R & D-related information becomes a Pareto-efficient Nash equilibrium strategy. These findings suggest that using public subsidies to R & D disclosure can lead to a win-win result, eliminating the unpleasant non-disclosing outcome from a societal perspective. & COPY; 2023 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).