Corporate transparency

Jeff Bone
Mon, 07 Jan 2002 15:06:06 -0600

Dave Long wrote:

> A) In a world with secrecy, they can
> effectively duplicate without having
> to copy.  (what is 2+2?  did you copy
> my answer?)

And that shouldn't be a problem, nor should artificial gov't granted
monopolies on concept spaces (i.e., patents) prevent it.  I.e., you can't
constrain discovery nor should you prevent application of discoveries.

I.e., I'm not arguing *for* artificial mechanisms to protect secrecy, I'm
arguing *against* legislative mechanisms that prevent it.  A trade secret
should be a trade secret, bottom line, end of story.

> It may be a valid investment from
> management's viewpoint, but likely
> not from the shareholders'.  Here
> is the quick sketch:

I agree completely with your scenario, but that's just not at all the
substance of what we were talking about.  Problems (for innovators)
*primarily* occur when DISCREDIT or COPY succeed.  BUY is an acceptable
outcome, as value is exhanged between the parties involved. But both
DISCREDIT and BUY are unnecessary in a world with enforced transparency,
and COPY becomes trivial --- therefore innovators have no incentives.

I disagree with your conclusion, though.  DISCREDIT/COPY/BUY (or, in
transparentland, just COPY) is a valid "investment" (i.e., strategy) for
dominant player P --- and even for P's shareholders, since this strategy is
maximally preserving of market share --> revenue streams to which share
value is presumably tied in the face of challenge from disruptive