Replication data for: Preemption Games: Theory and Experiment
Principal Investigator(s): View help for Principal Investigator(s) Steven T. Anderson; Daniel Friedman; Ryan Oprea
Version: View help for Version V1
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AER20080616R2_Data | 10/11/2019 02:57:PM | ||
LICENSE.txt | text/plain | 14.6 KB | 10/11/2019 10:57:AM |
Project Citation:
Anderson, Steven T., Friedman, Daniel, and Oprea, Ryan. Replication data for: Preemption Games: Theory and Experiment. Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112371V1
Project Description
Summary:
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Several impatient investors with private costs Ci face an indivisible irreversible investment opportunity whose value V is governed by geometric Brownian motion. The first investor i to seize the opportunity receives the entire payoff, V-Ci. We characterize the symmetric Bayesian Nash equilibrium for this game. A laboratory experiment confirms the model's main qualitative predictions: competition drastically lowers the value at which investment occurs; usually the lowest-cost investor preempts the other investors; observed investment patterns in competition (unlike monopoly) are quite insensitive to changes in the Brownian parameters. Support is more qualified for the prediction that markups decline with cost. (JEL C73, D44, D82, G31)
Scope of Project
JEL Classification:
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C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
D44 Auctions
D82 Asymmetric and Private Information; Mechanism Design
G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
D44 Auctions
D82 Asymmetric and Private Information; Mechanism Design
G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
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