Self-interested agents produce information in an attempt to convince a principal to act on their behalf. Agents provide less informative evidence than the principal prefers since doing so maximizes the probability the principal acts in their favor. If the principal faces constraints that limit...

In classical models of markets, the state of nature is revealed regardless of the actions agents take. If instead agents can uncover information they will determine which states can be distinguished and thus which goods are traded. Competitive equilibria can then be inefficient. One source of...

This paper considers the generation and provision of data products in the markets for information. Buyers face a decision problem with uncertainty of two states. They can purchase experiments to augment their private information. A buyer's willingness to pay for an experiment depends on his...

We analyze competitions where the contestants evaluate each other and find the first contestant to be disadvantaged. We suspect that this is due to information diffusion, Bayesian belief updating taking place in course of the contest and initial uncertainty about a contestant's relative quality....

The objective of our paper is to study R&D investments and pricing behavior in an environment with fundamental uncertainty. We designed a multi-period experiment in which each period consisted of two stages, an R&D phase and a pricing stage. Participants in the experiment had almost no...

Empirical applications of real options models in competitive environments implicitly exploit the optimality of myopic planning. In a seminal paper [Leahy, J.V., 1993. Investment in Competitive Equilibrium: the Optimality of Myopic Behavior. Quarterly Journal of Economics 108, 1105–1133] shows...

This paper examines the optimal production decision of the competitive firm under price uncertainty when the firm's preferences exhibit smooth ambiguity aversion. Ambiguity is modeled by a second‐order probability distribution that captures the firm's uncertainty about which of the subjective...

Innovation is typically a trial-and-error process. While some research paths lead to the innovation sought, others result in dead ends. Because firms benefit from their competitors working in the wrong direction, they do not reveal their dead-end findings. Time and resources are wasted on...