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De-synchornized Clocks in Preemption Games with Risky Prospects

Andrei Barbos

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: Clock Games; Timing Games; Preemption (search for similar items in EconPapers)
JEL-codes: D80 D90 (search for similar items in EconPapers)
Date: 2012-05-31
New Economics Papers: this item is included in nep-cta, nep-gth and nep-hpe
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Journal Article: De-synchronized clocks in preemption games with risky prospects (2013) Downloads
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