Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296436 
Year of Publication: 
2023
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 18 [Issue:] 3 [Year:] 2023 [Pages:] 1141-1180
Publisher: 
The Econometric Society, New Haven, CT
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.
Subjects: 
investment timing
Social learning
strategic information acquisition
JEL: 
C73
D82
D83
G24
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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