Technology Adoption, Social 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 Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 306.
Date of creation: Feb 2010
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More information through EDIRC
Information Externality; Strategic Waiting; Delay; Information Cascade; Investment Boom; Optimal Taxation;
Other versions of this item:
- 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.
- Paul Heidhues & Nicolas Melissas, 2010. "Technology Adoption, Socila Learning, and Economic Policy," Working Papers 1002, Centro de Investigacion Economica, ITAM.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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