Title of article
Rational exuberance
Author/Authors
Paul Heidhues، نويسنده , , Paul and Melissas، نويسنده , , Nicolas، نويسنده ,
Issue Information
ماهنامه با شماره پیاپی سال 2012
Pages
21
From page
1220
To page
1240
Abstract
We study a two-player investment game with information externalities. Necessary and sufficient conditions for a unique symmetric switching equilibrium are provided. When public news indicates that the investment opportunity is very profitable, too many types are investing early and investments should therefore be taxed. Conversely, any positive investment tax is suboptimally high if the public information is sufficiently unfavorable.
Keywords
Strategic waiting , DELAY , Information cascade , Information externality , Social Learning
Journal title
European Economic Review
Serial Year
2012
Journal title
European Economic Review
Record number
1798744
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