Project selection: Commitment and competition

• 成果类型: Article
• 署名作者: Atal, Vidya; Bar, Talia; Gordon, Sidartha
• 署名单位: Montclair State University; University of Connecticut; Universite PSL; Universite Paris-Dauphine; Centre National de la Recherche Scientifique (CNRS); Institut de Recherche pour le Developpement (IRD); Laboratoire dEconomie de Dauphine LEDa
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2016.01.011
• 发表日期: 2016
• 页码: 30-48
• 关键词: Project selection; search; COMMITMENT; Markov perfect equilibrium

摘要

We examine project selection decisions of firms constrained in the number of projects they can handle at once. A new project opportunity arises every period. Taking on a project requires a commitment of uncertain duration, preventing the firm from selecting another project in subsequent periods until the commitment ends. In our dynamic game, when two firms are free of commitment, they move sequentially in random order. Symmetric pure strategy Markov perfect equilibria always exist. In equilibrium, the first mover strategically rejects some projects that are then selected by the second mover, even when the value of the project is the same for both firms. A monopolist rejects more projects, and adopts ones of higher average quality compared to the duopolist. Duopolists select too few projects compared to their jointly optimal behavior. We extend the model to allow for externalities, asymmetry, and n > 2 firms. (C) 2016 Elsevier Inc. All rights reserved.