Can herding improve investment decisions?

• 成果类型: Article
• 署名作者: Khanna, Naveen; Mathews, Richmond D.
• 署名单位: Michigan State University; Duke University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2010.00129.x
• 发表日期: 2011
• 页码: 150-174
• 关键词: information acquisition; empirical-analysis; strategic delay; venture; entry; aggregation; TECHNOLOGY; BOUNDARIES; alliances; CONTRACTS

摘要

Existing models show that herding in decisions can cause significant information loss, inferior information aggregation, and impaired decision making. However, we show that in a multistage decision setting with endogenous information production, herding on the initial decision can actually result in superior aggregate information and improved decisions. This is because the possibility of herding by a follower incentivizes the leader to increase its ex ante information production to an extent that it can dominate the information loss from herding. Examples include decisions to enter new markets, fund R&D, and provide early-stage venture capital.