Your article is protected by copyright and all rights are held exclusively by Springer-Verlag Gmb... more Your article is protected by copyright and all rights are held exclusively by Springer-Verlag GmbH Germany, part of Springer Nature. This e-offprint is for personal use only and shall not be self-archived in electronic repositories. If you wish to self-archive your article, please use the accepted manuscript version for posting on your own website. You may further deposit the accepted manuscript version in any repository, provided it is only made publicly available 12 months after official publication or later and provided acknowledgement is given to the original source of publication and a link is inserted to the published article on Springer's website. The link must be accompanied by the following text: "The final publication is available at link.springer.com".
We analyze the effect of industrial espionage on limit-pricing models. We consider an incumbent m... more We analyze the effect of industrial espionage on limit-pricing models. We consider an incumbent monopolist engaged in R&D trying to reduce his cost of production and deter a potential entrant from entering the market. The R&D project may be successful or not and its outcome is a private information of the incumbent. The entrant has an access to an Intelligence System (IS hereafter) of a certain precision that generates a noisy signal on the outcome of the R&D project, and she decides whether to enter the market based on two signals: the price charged by the incumbent and the signal sent by the IS. It is assumed that the precision of the IS is exogenous and common knowledge. Our fundamental result is that for intermediate values of the IS precision, the set of pooling equilibria is non-empty even with profitable entry and the entrant enters if the IS tells her the R&D project was not successful. Since in the classical limit- pricing models the entrant never enters in a pooling equili...
We analyze industrial espionage in the context of entry deterrence. We consider a monopoly incumb... more We analyze industrial espionage in the context of entry deterrence. We consider a monopoly incumbent, who may expand capacity to deter entry, and a potential entrant who owns an inaccurate Intelligence System. The Intelligence System generates a noisy signal on incumbent's actions and the potential entrant decides whether to enter based on this signal. If the precision of the Intelligence System is commonly known, the incumbent will signal-jam to manipulate the distribution of likely signals and hence the entrant's decisions. Therefore, the incumbent will benefit from his rival's espionage. In contrast, the spying firm (the entrant) will typically gain if the espionage accuracy is sufficiently high and privately known by her. In this setting, the market will be more competitive under espionage.
International Journal of Industrial Organization, 2018
We analyze the economic impact of process innovations where the innovator auctions o licenses to ... more We analyze the economic impact of process innovations where the innovator auctions o licenses to both potential entrants and incumbent rms. It is shown that opening the market to entrant licensees, the incentive to innovate is maximized in a monopoly market as was envisioned by Schumpeter (1942). This is in contrast to previous literature on licensing of process innovations where entry is excluded. There the incentive to innovate is maximized in oligopoly market if licenses are sold by auction (Sen and Tauman (2007)) or in competitive market if licenses are sold by royalty (Arrow (1962)). The post-innovation market structure, the diusion of the innovation and the social welfare are analyzed and compared with the case where entry is excluded.
Under complete information, for k 3, a seller of a single-unit k-price auction obtains higher rev... more Under complete information, for k 3, a seller of a single-unit k-price auction obtains higher revenue than in a first or second price auction when the valuations and the bids are discrete and no bidder is using a (weakly) dominated strategy.
Your article is protected by copyright and all rights are held exclusively by Springer-Verlag Gmb... more Your article is protected by copyright and all rights are held exclusively by Springer-Verlag GmbH Germany, part of Springer Nature. This e-offprint is for personal use only and shall not be self-archived in electronic repositories. If you wish to self-archive your article, please use the accepted manuscript version for posting on your own website. You may further deposit the accepted manuscript version in any repository, provided it is only made publicly available 12 months after official publication or later and provided acknowledgement is given to the original source of publication and a link is inserted to the published article on Springer's website. The link must be accompanied by the following text: "The final publication is available at link.springer.com".
We analyze the effect of industrial espionage on limit-pricing models. We consider an incumbent m... more We analyze the effect of industrial espionage on limit-pricing models. We consider an incumbent monopolist engaged in R&D trying to reduce his cost of production and deter a potential entrant from entering the market. The R&D project may be successful or not and its outcome is a private information of the incumbent. The entrant has an access to an Intelligence System (IS hereafter) of a certain precision that generates a noisy signal on the outcome of the R&D project, and she decides whether to enter the market based on two signals: the price charged by the incumbent and the signal sent by the IS. It is assumed that the precision of the IS is exogenous and common knowledge. Our fundamental result is that for intermediate values of the IS precision, the set of pooling equilibria is non-empty even with profitable entry and the entrant enters if the IS tells her the R&D project was not successful. Since in the classical limit- pricing models the entrant never enters in a pooling equili...
We analyze industrial espionage in the context of entry deterrence. We consider a monopoly incumb... more We analyze industrial espionage in the context of entry deterrence. We consider a monopoly incumbent, who may expand capacity to deter entry, and a potential entrant who owns an inaccurate Intelligence System. The Intelligence System generates a noisy signal on incumbent's actions and the potential entrant decides whether to enter based on this signal. If the precision of the Intelligence System is commonly known, the incumbent will signal-jam to manipulate the distribution of likely signals and hence the entrant's decisions. Therefore, the incumbent will benefit from his rival's espionage. In contrast, the spying firm (the entrant) will typically gain if the espionage accuracy is sufficiently high and privately known by her. In this setting, the market will be more competitive under espionage.
International Journal of Industrial Organization, 2018
We analyze the economic impact of process innovations where the innovator auctions o licenses to ... more We analyze the economic impact of process innovations where the innovator auctions o licenses to both potential entrants and incumbent rms. It is shown that opening the market to entrant licensees, the incentive to innovate is maximized in a monopoly market as was envisioned by Schumpeter (1942). This is in contrast to previous literature on licensing of process innovations where entry is excluded. There the incentive to innovate is maximized in oligopoly market if licenses are sold by auction (Sen and Tauman (2007)) or in competitive market if licenses are sold by royalty (Arrow (1962)). The post-innovation market structure, the diusion of the innovation and the social welfare are analyzed and compared with the case where entry is excluded.
Under complete information, for k 3, a seller of a single-unit k-price auction obtains higher rev... more Under complete information, for k 3, a seller of a single-unit k-price auction obtains higher revenue than in a first or second price auction when the valuations and the bids are discrete and no bidder is using a (weakly) dominated strategy.
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Papers by Yair Tauman