A firm actively manages its rival's beliefs by disclosing and concealing information on the size of its process innovation. The firm's disclosure strategy results from the trade-off between two effects on product market incentives. First, the firm's competitor learns that the firm is efficient,...

A firm actively manages its rival’s beliefs by disclosing and concealing information on the size of its process innovation. The firm’s disclosure strategy results from the trade-off between two effects on product market incentives. First, the firm’s competitor learns that the firm is...

The pharmaceutical industry is a textbook example of a science based sector characterized by high R&D cost, uncertain and spillovers for which patent protection assures appropriability thus providing incentives for innovation. Indeed, Mansfield (1986) found that, absent patent protection, 60...