Technology Adoption, Social Learning, and Economic Policy

Paul Heidhues (heidhues@dice.hhu.de) and Nicolas Melissas

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We study a two-player dynamic investment model with information externalities and provide necessary and sufficient conditions for a unique switching equilibrium. When the public information is sufficiently high and a social planer therefore expects an investment boom, investments should be taxed. Conversely, any positive investment tax is suboptimally high if the public information is sufficiently unfavorable.We also show that an investment tax may increase overall investment activity.

Keywords: Information Externality; Strategic Waiting; Delay; Information Cascade; Investment Boom; Optimal Taxation (search for similar items in EconPapers)
JEL-codes: D62 D83 (search for similar items in EconPapers)
Date: 2010-02
New Economics Papers: this item is included in nep-ict
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://epub.ub.uni-muenchen.de/13248/1/306.pdf (application/pdf)

Related works:
Working Paper: Technology Adoption, Socila Learning, and Economic Policy (2010)
Working Paper: Technology adoption, social learning, and economic policy (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:306

Access Statistics for this paper

More papers in Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich Geschwister-Scholl-Platz 1, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg (sfb-tr15@vwl.uni-muenchen.de).