Entry and espionage with noisy signals

• 成果类型: Article
• 署名作者: Barrachina, Alex; Tauman, Yair; Urbano, Amparo
• 署名单位: Universidad Carlos III de Madrid; Reichman University; State University of New York (SUNY) System; Stony Brook University; University of Valencia; University of Valencia
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.10.005
• 发表日期: 2014
• 页码: 127-146
• 关键词: Espionage; entry; asymmetric information; Signal-jamming

摘要

We analyze the effect of industrial espionage on entry deterrence. We consider a monopoly incumbent who may expand capacity to deter entry, and a potential entrant who owns an Intelligence System. The Intelligence System (IS) generates a noisy signal based on the incumbent's actions. The potential entrant uses this signal to decide whether or not to enter the market. The incumbent may signal-jam to manipulate the likelihood of the noisy signals and hence affect the entrant's decisions. If the precision of the IS is commonly known, the incumbent benefits from his rival's espionage. Actually, he benefits more the higher is the precision of the IS while the spying entrant is worse off with art IS of relatively high quality. When the IS quality is private information of the entrant, the incumbent is better off with an IS of high expected precision while the entrant benefits from one of high quality. In this case espionage makes the market more competitive. (C) 2013 Elsevier Inc. All rights reserved.