The consequences of endogenizing information for the performance of a sequential decision procedure
Journal of Economic Behavior & Organization , Volume 65 - Issue 3-4 p. 667- 681
We analyse the implications of endogenizing information collection and reputational concerns for the performance of a sequential decision structure. In this model, two agents decide in a sequence whether to implement a public project. The cost of gathering information is private. We derive two results. First, endogenizing information replaces the herding problem with a free-rider problem. Second, endogenizing information aggravates the distortionary effect of reputational concerns.
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|Journal of Economic Behavior & Organization|
|Organisation||Erasmus School of Economics|
Visser, B, & Swank, O.H. (2008). The consequences of endogenizing information for the performance of a sequential decision procedure. Journal of Economic Behavior & Organization, 65(3-4), 667–681. doi:10.1016/j.jebo.2005.11.003