Dundee Discussion Papers in Economics 243: Non-cooperative incentives to share knowledge in competitive environments

In this paper we study a model where non-cooperative agents
may exchange knowledge in a competitive environment. As a po-
tential factor that could induce the knowledge disclosure between
humans we consider the timing of the moves of players. We de-
velop a simple model of a multistage game in which there are only
three players and competition takes place only within two stages.
Players can share their private knowledge with their opponents
and the knowledge is modelled as in‡uencing their marginal cost
of e¤ort. We identify two main mechanisms that work towards
knowledge disclosure. One of them is that before the actual com-
petition starts, the stronger player of the …rst stage of a game
may have desire to share his knowledge with the "observer", be-
cause this reduces the valuation of the prize of the weaker player
of that stage and as a result his e¤ort level and probability of
winning in a …ght. Another mechanism is that the "observer"
may have sometimes desire to share knowledge with the weaker
player of the …rst stage, because in this way, by increasing his
probability of winning in that stage, he decreases the probabil-
ity of winning of the stronger player. As a result, in the second
stage the "observer" may have greater chances to meet the weaker
player rather than the stronger one.