We analyze industrial espionage in the context of entry deterrence. We consider a monopoly incumbent, who may expand capacity to deter entry, and a potential entrant who owns an inaccurate Intelligence System. The Intelligence System generates a noisy signal on incumbent's actions and the potential entrant decides whether to enter based on this signal. If the precision of the Intelligence System is commonly known, the incumbent will signal-jam to manipulate the distribution of likely signals and hence the entrant's decisions. Therefore, the incumbent will benefit from his rival's espionage. In contrast, the spying firm (the entrant) will typically gain if the espionage accuracy is sufficiently high and privately known by her. In this setting, the market will be more competitive under espionage.

The effects of information-gathering activities on an entry model with asymmetric information are analysed. The baseline game is a classical entry game where an incumbent monopoly faces potential entry by a firm without knowing for certain whether this potential entrant is weak or strong. If the entrant decides to enter, the incumbent must compete with him and decide whether to accommodate or to fight. The paper extends this entry game and considers that the monopoly credibly informs the entrant that she is able to gather information about his type if he finally enters the market, thereby helping her to better decide whether to accommodate or fight. Since knowing this might reduce the entrant's willingness to compete with her, we focus the analysis on the effectiveness of this monopoly's communicative action as an entry deterrence strategy. The results suggest that such an action is effective regardless of the precision of the Intelligence System (IS) only for a relatively low payoff gained by the entrant from competing with the incumbent. For higher payoffs for the entrant, the effectiveness of this action requires a considerably accurate IS.

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The interaction between nurses and their managers is a very important factor in nurses’ error reporting behaviour, which is crucial to improving patient safety in healthcare organizations. However, little theoretical work has been undertaken to analyse this interaction. This paper uses a game-theoretic principal–agent framework with asymmetric information to study this interaction. We suppose that the principal (the nurse manager) asks the agent (the nurse) to perform a task with a certain patient. In case a mistake is made while treating the patient, the nurse has to decide whether to report it to the manager, who can observe whether the patient suffered an accident. We consider different manager’s leadership styles and analyse their performance in obtaining error notification from nurses in this framework.

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