CLUSTERING IN N-PLAYER PREEMPTION GAMES

• 成果类型: Article
• 署名作者: Argenziano, Rossella; Schmidt-Dengler, Philipp
• 署名单位: University of Essex; University of Mannheim
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1111/jeea.12054
• 发表日期: 2014
• 页码: 368-396
• 关键词: technology adoption; market-structure; strategic delay; INVESTMENT; diffusion; MODEL; uncertainty; COMPETITION; time

摘要

We study a complete information preemption game in continuous time. A finite number of firms decide when to make an irreversible, observable investment. Upon investment, a firm receives flow profits, which decrease in the number of firms that have invested. The cost of investment declines over time exogenously. We characterize the subgame-perfect equilibrium outcome, which is unique up to a permutation of players. When the preemption race among late investors is sufficiently intense, the preemption incentive for earlier investors disappears, and two or more investments occur at the same time. We identify a sufficient condition in terms of model parameters: clustering of investments occurs if the flow profits from consecutive investments are sufficiently close. This shows how clustering can occur in the absence of coordination failures, informational spillovers, or positive payoff externalities.