Strategic Delay and Rational Imitation in the Laboratory
Kene Boun My (),
Jean-Christophe Vergnaud () and
Marc Willinger ()
Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group
This paper investigates market failures due to strategic delays. We test experimentally a discrete model of dynamic investment, where two privately informed agents have an option to invest at the time of their choice in the presence of waiting costs. The equilibrium outcome of our experimental game is characterized by efficient imitation but complete revelation of information is time consuming. In accordance with the equilibrium solution, subjects better informed take investment decision before subjects who are less informed and subjects’ decisions exhibit rational imitation. Still, subjects do not play exactly in accordance with the equilibrium sequence and we interpret their deviations from equilibrium play as an attempt to internalize the information externalities.
Keywords: Information Externalities; Social Learning; Strategic Delay; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D82 (search for similar items in EconPapers)
Pages: 26 pages
New Economics Papers: this item is included in nep-cse, nep-exp and nep-gth
References: View complete reference list from CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server papers.econ.mpg.de: No such host is known.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:esi:discus:2005-35
Ordering information: This working paper can be ordered from
http://www.econ.mpg. ... arch/ESI/discuss.php
Access Statistics for this paper
More papers in Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group Contact information at EDIRC.
Bibliographic data for series maintained by Karin Richter ( this e-mail address is bad, please contact ).