Investment dynamics with common and private values

Behavioral biases in endogenous-timing herding games: An experimental study

“…Our theoretical framework is based on the model in Levin and Peck (2008). There are n risk-neutral players.…”

“…Chamley and Gale (1994) address these issues theoretically for the case where all players have the same investment cost so that types are one-dimensional. Levin and Peck (2008) extend the analysis to two-dimensional types with heterogenous investment costs. Both studies find that the Nash equilibrium (NE) outcome is often inefficient.…”

“…Although Levin and Peck (2008) consider continuous cost distributions, our experimental design considers a discrete distribution containing either one point (c i = L or c i = H but is the same for all subjects in a given game) or two points (c i = L or c i = H and can differ across subjects in a given game). This simplifies the decision making required of subjects and simplifies the data analysis.…”

Bad news can be good news: Early dropouts in an English auction with multi-dimensional signals

“…Combined with the fact that the bidder with the lowest possible type (s = 0) receives the same expected profit, expected payoff to each bidder is the same across all the standard auctions. 11 Payoff equivalence, in turn, implies revenue equivalence, because the expected total surplus is the same across all the standard auctions.…”

“…Levin and Peck (2006) single dimensional indices. study a dynamic investment game in which potential investors observe a signal correlated with the common investment return and a signal representing their private cost of investing.…”