2026 General Seminar no. 10 - Francisco Poggi (Mannheim)

Title: Strategic Concealment in Innovation Races

by Yonggyun Kim and Francisco Poggi

Abstract:  Firms racing to innovate often achieve interim technological breakthroughs. When these advances are acquired privately, firms face a choice: disclose the discovery or keep it secret. 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 direct development and research for new technology. Our results show that excessively strong rewards from winning the race and strong prior-use protections can discourage disclosure, thereby impeding knowledge spillovers and slowing the social speed of innovation.