Hindsight , Foresight , and Insight : An Experimental Study of a Small-Market Investment Game with Common and Private Values ∗ †

@inproceedings{Ivanov2006HindsightF,
  title={Hindsight , Foresight , and Insight : An Experimental Study of a Small-Market Investment Game with Common and Private Values ∗ †},
  author={Asen Ivanov},
  year={2006}
}
We experimentally test an endogenous-timing investment model in which subjects observe their cost of investing and a signal correlated with the common investment return. Subjects overinvest, relative to the Nash benchmark. We can separately consider whether a subject draws inferences from the other subject’s investment, in hindsight, and whether a subject has the foresight to delay profitable investment and learn from market activity. In contrast to Nash, cursed equilibrium, and level-k belief… CONTINUE READING
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