Replication data for: Preemption Games: Theory and Experiment
- Anderson, Steven T.
- Friedman, Daniel
- Oprea, Ryan
AbstractSeveral 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)
Is supplement to
DOI: 10.1257/aer.100.4.1778 (Text)
Anderson, Steven T, Daniel Friedman, and Ryan Oprea. “Preemption Games: Theory and Experiment.” American Economic Review 100, no. 4 (September 2010): 1778–1803. https://doi.org/10.1257/aer.100.4.1778.
- ID: 10.1257/aer.100.4.1778 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-11