Innovation, Competition, and Investment Timing
研究多个创新者竞争向投资者提交投资提案时，竞争如何通过降低信息租金加速创新，并实现最优投资时机。
Abstract In our model multiple innovators compete against each other by submitting investment proposals to an investor. The investor chooses the least expensive proposal and the timing of the investment. Innovators privately learn the cost of investing. The investor has to compensate the innovators for their reservation wages, but competition makes screening easier and helps to erode innovators’ informational rents. Consequently, competition leads to faster innovation, because the investor has less need to delay expensive investments. With an endogenous number of innovators investment timing becomes first best. Received June 5, 2013; accepted February 26, 2016 by Editor Paolo Fulghieri.