protect their reputations. Agents delay abandonment attempting to signal their quality. When a public common shock forces … if they are unaffected by the shock. Such "blending in with the crowd" effect creates an additional incentive to delay … abandonment ahead of the shock, leading to accumulation of "living dead" projects, which further amplifies the shock. The …

, when the industry faces a common shock that indiscriminately forces liquidation of a subset of projects, agents with bad …" creates an additional incentive to delay liquidation, further amplifying the shock. As a result, even minuscule common shocks …We provide a dynamic model of an industry in which agents strategically time liquidation decisions in an effort to …