
Abstract
The literature on license auctions for process innovations in oligopoly assumed that the auctioneer reveals the winning bid and stressed that this gives firms an incentive to signal strength through their bids, to the benefit of the innovator. In the present paper we examine whether revealing the winning bid is optimal. We consider three disclosure rules: full, partial, and no disclosure of bids, which correspond to standard auctions. We show that more information disclosure increases the total surplus divided between firms and the innovator as well as social surplus. More disclosure also increases bidders’ payoff. However, no disclosure maximizes the innovator’s expected revenue.
Item Type: | Paper |
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Keywords: | Auctions, innovation, licensing, information sharing. |
Faculties: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A7 - Auktionen, Anreizprobleme und Wettbewerb |
Subjects: | 300 Social sciences > 330 Economics |
JEL Classification: | D21, D43, D44, D45 |
URN: | urn:nbn:de:bvb:19-epub-21109-3 |
Language: | English |
Item ID: | 21109 |
Date Deposited: | 15. Jul 2014, 07:34 |
Last Modified: | 04. Nov 2020, 13:01 |