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| Dublin Core |
PKP Metadata Items |
Metadata for this document |
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| 1. |
Title |
Title of document |
Strategic investment evaluation |
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| 2. |
Creator |
Author's name, affiliation |
Rishabh Kirpalani; Department of Economics, University of Wisconsin-Madison |
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| 2. |
Creator |
Author's name, affiliation |
Erik Madsen; Department of Economics, New York University |
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| 3. |
Subject |
Subject(s) |
Social learning, investment timing, strategic information acquisition |
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| 3. |
Subject |
Subject classification |
C73, D82, D83, G24 |
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| 4. |
Description |
Abstract |
We study the interaction of incentives to free-ride on information acquisition and strategically delay irreversible investment in environments in which multiple firms evaluate an investment opportunity. In our model, two firms decide how quickly to privately obtain information about the profitability of a project, and when (if ever) to publicly invest in it. Multiple equilibria exist, differing with respect to how much information firms acquire as well as how quickly they invest. The equilibrium which maximizes aggregate payoffs features asymmetric play with distinct leader and follower roles when firms are patient, but features symmetric play when firms are impatient and information acquisition costs are sufficiently high. |
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| 5. |
Publisher |
Organizing agency, location |
Econometric Society |
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| 6. |
Contributor |
Sponsor(s) |
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| 7. |
Date |
(YYYY-MM-DD) |
2023-07-20 |
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| 8. |
Type |
Status & genre |
Peer-reviewed Article |
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| 8. |
Type |
Type |
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| 9. |
Format |
File format |
pdf
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| 10. |
Identifier |
Universal Resource Indicator |
https://econtheory.org/ojs/index.php/te/article/view/20231141 |
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| 11. |
Source |
Journal/conference title; vol., no. (year) |
Theoretical Economics; Volume 18, Number 3 (July 2023) |
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| 12. |
Language |
English=en |
en |
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| 15. |
Rights |
Copyright and permissions |
Authors who publish in Theoretical Economics will release their articles under the Creative Commons Attribution-NonCommercial license. This license allows anyone to copy and distribute the article for non-commercial purposes provided that appropriate attribution is given. |