Disclosure or Secrecy? The Economics of Open Science

Open Science is a dynamic system of knowledge production that depends on the disclosure of knowledge by researchers as an input into knowledge production by future researchers. This paper develops an overlapping generations model of cumulative research to analyze the conditions supporting Open Science as an economic institution. The model focuses on the trade-off faced by researchers between disclosure and secrecy. While secrecy yields private returns that are independent of the actions of future generations, the benefits to disclosure depend in part on the use of disclosed knowledge by subsequent researchers. Each research generation therefore chooses between maximizing the private exploitation of knowledge and earning benefits arising from participation in Open Science. The optimal choice depends on a dynamic equilibrium process, since the returns to disclosure and research investment by one generation depends on the investment and disclosure choices of prior generations, and the attribution behavior of future generations. Potential equilibria include 'Open Science,' 'Secrecy,' and a cyclic structure in which periods of Open Science are followed by Secrecy. The feasibility of Open Science as an equilibrium depends on parameters such as the costs of accessing prior knowledge, and the relative benefits to private exploitation under secrecy versus disclosure. Finally, in parameter regions where both Open Science and Secrecy can be supported, Open Science is associated with a higher level of social welfare