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In stochastic and competitive environments, investors face an investment dilemma because the environments provide conflicting incentives. Empirical research reports various behaviors exhibited by investors, including voluntary concurrent investments, which are called bandwagon investments....
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allocation of resources by encouraging rapid experimentation and efficient ex post transfer of knowledge across firms. Each firm … on the identity of the firm) always involve delayed and staggered experimentation, whereas the optimal allocation never … experimentation can be arbitrarily large. Appropriately-designed patents can implement the socially optimal allocation (in all …
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The power-to-take game is a simple two player game where players are randomly divided into pairs consisting of a take authority and responder. Both players in each pair have earned an income in an individual real effort decision-making experiment preceding the take game. The game consists of two...
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We present a duopoly model of strategic capital accumulation in continuous time with uncertainty, such that investment takes the form of singular control. Spot competition is of Cournot type. For this model there exists a parameterized and Pareto-rankable family of Markov perfect equiblibria in...
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