De-synchornized Clocks in Preemption Games with Risky Prospects
AbstractWe 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40846.
Date of creation: 31 May 2012
Date of revision:
Clock Games; Timing Games; Preemption;
Other versions of this item:
- Barbos, Andrei, 2013. "De-synchronized clocks in preemption games with risky prospects," Mathematical Social Sciences, Elsevier, vol. 65(3), pages 203-216.
- D90 - Microeconomics - - Intertemporal Choice - - - General
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-03 (All new papers)
- NEP-CTA-2012-09-03 (Contract Theory & Applications)
- NEP-GTH-2012-09-03 (Game Theory)
- NEP-HPE-2012-09-03 (History & Philosophy of Economics)
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