Share to Scare: Technology Sharing in the Absence of Intellectual Property Rights

Abstract

Cournot duopolists choose between sharing their technologies, for example, through scientific publications, or keeping them secret. The disadvantage of sharing efficient technologies is that a less efficient competitor imitates and becomes tougher. The advantage is that the competitor learns that the sharing firm is tougher than expected. Limited technology diffusion occurs in equilibrium, with at most one firm sharing. Unilateral sharing incentives are strongest for intermediate technologies. For identical distributions skewed towards efficient technologies, this yields equilibria where one firm shares all or only intermediate technologies, besides an equilibrium without sharing. Further, I consider profit implications, non-identical distributions, and several extensions.