Barbos, Andrei (2012): De-synchornized Clocks in Preemption Games with Risky Prospects.
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We study an optimal timing decision problem where an agent endowed with a risky investment opportunity trades the benefits of waiting for additional information against a potential loss in first-mover advantage. The players' clocks are de-synchronized in that they learn of the investment opportunity at different times. Previous literature has uncovered an inverted-U shaped relationship between a player's equilibrium expected expenditures and the measure of his competitors. This result no longer holds when the increase in the measure of players leads to a decrease in the degree of clock synchronization in the game. We show that the result reemerges if information arrives only at discrete times, and thus, a player's strategic beliefs are updated between decision times in a measurably meaningful way.
|Item Type:||MPRA Paper|
|Original Title:||De-synchornized Clocks in Preemption Games with Risky Prospects|
|Keywords:||Clock Games; Timing Games; Preemption|
|Subjects:||D - Microeconomics > D9 - Intertemporal Choice > D90 - General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General
|Depositing User:||Andrei Barbos|
|Date Deposited:||24 Aug 2012 15:48|
|Last Modified:||05 Oct 2016 14:28|
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