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• W3121478980 abstract "The economic analysis of trade-secret protection has traditionally focused on the interests of companies to conceal information from competitors in order to gain a competitive advantage through trade-secret law. This has neglected cases in which the interest is not in concealing information from competitors but from trading partners. We investigate trade-secret protection in such cases. Frequently, asymmetric information will lead to inefficient trade; at the same time, protecting private information might create incentives for socially desirable investments. We model this trade-off in a simple buyer-seller model and find that the optimal fine for violations of trade secrets is positive. In general, however, the welfare effects of increasing a fine are ambiguous. We discuss conditioning the legal protection on a minimum investment by the informed party to conceal the information and argue that this helps to apply trade-secret protection only when it increases welfare. This rationalizes important features of current legal practice." @default.
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• W3121478980 date "2009-08-21" @default.
• W3121478980 modified "2023-10-16" @default.
• W3121478980 title "An Economic Analysis of Trade-Secret Protection in Buyer-Seller Relationships" @default.
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• W3121478980 doi "https://doi.org/10.1093/jleo/ewp020" @default.
• W3121478980 hasPublicationYear "2009" @default.
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