Bargaining and Sharing Innovative Knowledge

We consider the problem of bargaining over the disclosure of interim research knowledge between two participants in an R&D race for an ultimate, patentable invention. Licence fee schedules that are functions of the “amount of knowledge disclosed” by the leading to the lagging agent, are examined for their abilities to attain efficient outcomes and varying shares of the surplus arising from disclosure. In her sequential-offers bargaining games, the uninformed buyer is able to elicit full disclosures without sharing the incremental surplus with any type of the licensor, and thus do as well as a perfectly informed and discriminating knowledge licensee.