TO SHARE OR NOT IN A COMPETITIVE INNOVATION MARKET

This paper investigates whether a firm with an innovation opportunity has an incentive to share it with other firms. The reward allocation schemes, cost of innovation and spillover effects of competition all have impacts on the probability of innovation success and the expected profit, leading the firm to make different decisions on whether to share an innovation opportunity. We examined the firm’s optimal disclosure decisions under the following two innovation profit allocation schemes: (1) all successful innovators receive the benefits (i.e. “Equal share of market” scheme) and (2) the first successful innovator takes all the innovation profit (i.e. “Winner-takes-all” scheme). Under the “Equal share of market” profit allocation scheme, we find that as the cost of the innovation activity increases, the firm's optimal innovation opportunity disclosure decision transfers from non-disclosure to disclosure, and then back to non-disclosure. This interesting pattern is driven by a trade-off between the risk of innovation failure and the loss of payoff due to competition. However, in the case of “Winner-takes-all”, only when the cost is sufficiently high may the firm consider disclosing innovation opportunity. The above conclusions are obtained by maximizing the expected profit from the firm's perspective. We also investigate the optimal level of spillover effect controlled by the government to maximize market potential, through enhancing or relaxing knowledge protection to inhibit or encourage the innovation spillovers. We find that the government allows a certain level of spillover effects to exist in order to stimulate market potential. In particular, the government will relax knowledge protection when the innovation is not costly and the reward is small; while the government will improve knowledge protection when the innovation competition is difficult and reward is high, which is meant to ensure the contest fairness.

本文研究了一个拥有创新机会的企业是否有动机将该机会分享给其他具备创 新能力的企业。创新比赛的奖励设置、创新成本以及溢出效应都会对企业的创新成 功概率以及期望收益产生影响，从而使得企业对于创新机会是否分享做出不同的 决策。本文研究了在（1）只有第一个成功的创新者拿走所有的创新成功报酬（即 “赢家通吃” 模式）和（2）创新成功的所有创新企业都能获得收益（即平分市场模 式）的利润分配模式下，企业的最佳信息披露决策。在平分市场的利润分配计划 下，我们发现，随着创新活动成本的增加，企业的最佳创新机会披露决策从不披露 机会变成披露，然后又回到不披露。这种有趣的模式实际上是创新失败的风险和 竞争带来的报酬损失之间的权衡所驱动的。同时，我们验证了企业选择分享创新 机会的举动是有利于增加创新活动的总成功率的。而在“赢者通吃”这种情况下， 只有当成本足够高时，企业才会考虑披露创新机会。以上的结论是从企业的角度 考虑最大化期望收益得到的。此外，我们还从政府的角度，考虑了市场潜力最大化 的非盈利目标，并证明政府总是允许一定程度的溢出效应存在于创新市场中。特 别的是，当创新的难度较小，奖励较少，创新比赛的含金量比较低的时候，允许更 高的溢出效应存在于市场中是有利于激发市场潜力的。相反地，当创新比赛的难 度和奖励升级，那么加强对创新者的劳动成果的保护力度，保障竞赛公平才是最 有利于总市场潜力的。

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