To Stand on the Shoulders of Giants: Should We Protect Initial Discoveries in Multi-Agent Exploration?

We present a game theoretic analysis of a competitive search game which clarifies the expected advantages and disadvantages of granting first innovators exclusive rights to enjoy subsequent discoveries. We compare the theoretical predictions with actual behavior of players in the lab and find that the benefit of protection stems from increasing exploration efficiency, rather than encouraging initial exploration efforts. The latter, which contradicts theoretical predictions, can be explained by the cognitive bias of underweighting rare events.