Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320282 
Year of Publication: 
2025
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 20 [Issue:] 1 [Year:] 2025 [Pages:] 93-130
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We introduce a collective experimentation problem where a continuum of agents choose the timing of irreversible actions under uncertainty and where public feedback from the actions arrives gradually over time. The leading application is the adoption of new technologies. The socially optimal expansion path entails an informational trade-off where acting today speeds up learning but postponing capitalizes on the option value of waiting. We contrast the social optimum to the decentralized equilibrium where agents ignore the social value of information they generate. We show that the equilibrium can be obtained by assuming that agents ignore the future actions of other agents, which lets us recast the complicated two-dimensional problem as a series of one-dimensional problems.
Subjects: 
experimentation
optimal stopping
Social learning
technology adoption
JEL: 
C61
C73
D82
D83
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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