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Industrial cyberespionage in research and development races

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  • Stupak, O.

Abstract

This paper examines a dynamic R&D race in which competitors can conduct cyberespionage against each other. We develop a framework that analyses the influence of cyberespionage on innovative incentives, companies' payoffs and the quality of the end product. We demonstrate that industrial espionage has an ambiguous influence on the overall investments exerted in the race and companies' expected payoffs and might even be beneficial for the quality of innovative end-products under certain circumstances.

Suggested Citation

  • Stupak, O., 2023. "Industrial cyberespionage in research and development races," Cambridge Working Papers in Economics 2337, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2337
    Note: os446
    as

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    File URL: https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2337.pdf
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    References listed on IDEAS

    as
    1. Matias Busso & Sebastian Galiani, 2019. "The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 33-56, January.
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    3. C. Jill Stowe & Scott M. Gilpatric, 2010. "Cheating and Enforcement in Asymmetric Rank‐Order Tournaments," Southern Economic Journal, John Wiley & Sons, vol. 77(1), pages 1-14, July.
    4. Barrachina, Alex & Tauman, Yair & Urbano, Amparo, 2014. "Entry and espionage with noisy signals," Games and Economic Behavior, Elsevier, vol. 83(C), pages 127-146.
    5. Barry J. Nalebuff & Joseph E. Stiglitz, 1983. "Prices and Incentives: Towards a General Theory of Compensation and Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 21-43, Spring.
    6. C. Jill Stowe & Scott M. Gilpatric, 2010. "Cheating and Enforcement in Asymmetric Rank-Order Tournaments," Southern Economic Journal, John Wiley & Sons, vol. 77(1), pages 1-14, July.
    7. Denter, Philipp & Sisak, Dana, 2016. "Head starts in dynamic tournaments?," Economics Letters, Elsevier, vol. 149(C), pages 94-97.
    8. Po-Lu Chen, 2016. "Cross-Country Economic Espionage and Investment in Research and Development," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(4), pages 146-155, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Firm Strategy; Enterprise Policy; Innovation; Inventions.;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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