Equilibria in a dynamic global game: the role of cohort effects (Q2502348)

The paper contributes to the problem of timing in a special type of strategic games, namely in irreversible economic investments policy. The attention is focused on the strategy of waiting in order to optimize the knowledge of the stock market. The main problems appear to be related to the cohort effect connected with the technology adoption problems and with the positive contemporaneous network effect. It is shown that the satisfaction of dynamic increasing differences depends on the nature (endogenity or exogenity) of the period network effect. If the dynamic differences are increasing then the model has a unique rationalizable outcome.