"Objects in the Rearview Mirror : Information Acquisition"
with Payoff Rivalries and Observation Lags (with Lucie Ménager and Nicolas Klein)

Abstract :
We analyze a dynamic investment model in which short-lived agents sequentially decide how much to invest in a project of uncertain feasibility. The outcome of the
project (success/failure) is observed after a fixed time delay. We characterize the equilibrium and show that, in contrast with the case without delay, the unique equilibrium profile is not in threshold. If the prior belief is high, investment decreases discontinuously as agents become more pessimistic about the feasibility of the innovation. If the prior is low, equilibrium investment is not monotonic. We compare the total investment obtained in this equilibrium with that obtained with an alternative reward scheme where a mediator collects all the information about the players’ experiences until some deadline, and split the payoff between all the players who obtained a success before the deadline.