Strategic investment and learning with private information

A-Tier
Journal: Journal of Economic Theory
Year: 2022
Volume: 204
Issue: C

Authors (2)

Wagner, Peter A. (not in RePEc) Klein, Nicolas (Université de Montréal)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study social learning from actions and outcomes. Agents learn about future returns through privately observed signals, others' investment decisions and public experimentation outcomes when returns are realized. We characterize symmetric equilibria, and relate the extent of strategic delay of investments in equilibrium to the primitives of the information structure. Agents invest without delay in equilibrium when the most optimistic interim belief exceeds a threshold. Otherwise, delay in investments induces a learning feedback that may either raise or depress beliefs and investment choices. We show that, although ours is a strategic-experimentation game of pure informational externalities, private information may increase ex-ante welfare.

Technical Details

RePEc Handle
repec:eee:jetheo:v:204:y:2022:i:c:s0022053122001132
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25