Technology Adoption, Socila Learning, and Economic Policy
AbstractWe 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.
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Bibliographic InfoPaper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 1002.
Length: 46 pages
Date of creation: 2010
Date of revision:
Information Externality; Strategic Waiting; Delay; Information Cascade; Investment Boom; Optimal Taxation;
Other versions of this item:
- Heidhues, Paul & Melissas, Nicolas, 2010. "Technology Adoption, Social Learning, and Economic Policy," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 306, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Paul Heidhues & Nicolas Melissas, 2010. "Technology adoption, social learning, and economic policy," ESMT Research Working Papers ESMT-10-007, ESMT European School of Management and Technology.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alessandro Pavan & George-Marios Angeletos, 2008.
"Policy with Dispersed Information,"
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"A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades,"
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University of Chicago Press, vol. 100(5), pages 992-1026, October.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010. "A theory of Fads, Fashion, Custom and cultural change as informational Cascades," Levine's Working Paper Archive 1193, David K. Levine.
- Chamley, Christophe & Gale, Douglas, 1994.
"Information Revelation and Strategic Delay in a Model of Investment,"
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- Gale, D. & Chamley, C., 1992. "Information Revelation and Strategic Delay in a Model of Investment," Papers 10, Boston University - Department of Economics.
- Chamley, Christophe, 2004. "Delays and equilibria with large and small information in social learning," European Economic Review, Elsevier, vol. 48(3), pages 477-501, June.
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