- A-Z
- Jena Economic Resea...
- Volume 4
- Negative and Positi...
- Angeblicher Autor(in)
- Erschienen
- 2. Dezember 2010
- Nummer des Discussion-Papers
-
2010-085
- Schlagwort(e)
-
Competition
Preemption game
Strategic real option
- Zusammenfsg.
-
Agents compete to acquire a limited economic opportunity of uncertain pro…tability. Each agent decides how much he acquires public signals before making investment under fear of preemption. I show that equilibria have various levels of e¢ ciency under mild competition. The e¤ect of competition on the equilibrium strategy is di¤erent depending on which class of equilibrium we focus on. However, when competitive pressure is su¢ ciently high, there exists a unique equilibrium. Finally, I show that the e¤ect of competition on e¢ ciency is di¤erent between the common value and the private value setting. Strong competition leads to the least e¢ cient equilibrium for the common value setting but e¢ ciency can be improved by competition in the private value setting.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- JEL-Classification for JER
- C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; D83 - Search; Learning; Information and Knowledge; Communication; Belief