Abstract

http://ssrn.com/abstract=997905
 
 

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Strategic Information Spillover to Be Imitated: Incentive to Make Use of Relative Performance Evaluation


Young-Ro Yoon


Indiana University Bloomington - Department of Economics

July 3, 2007

CAEPR Working Paper No. 2007-011

Abstract:     
In this article, we deal with the topic of intentional information spillover using a model in which both informational- and payoff-externalities are present and the timing of agents' actions is endogenous. In this model, three players, who are heterogeneous in the quality of their information, compete with one another in a common task. According to the results, the weakly-informed players may voluntarily relinquish an option to wait, although no cost is imposed for a delay of action. When acting without a delay, they reveal their information with the hope that others will imitate them. This type of information spillover is due to their incentive, which is to make use of the relative performance evaluation structure under which a bad reputation can be shared if others are also wrong.

Number of Pages in PDF File: 30

Keywords: Blame sharing, Endogenous timing of actions, Herding, Information spillover, Informational externalities, Payoff externalities

JEL Classification: D81, D82

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Date posted: July 5, 2007  

Suggested Citation

Yoon, Young-Ro, Strategic Information Spillover to Be Imitated: Incentive to Make Use of Relative Performance Evaluation (July 3, 2007). CAEPR Working Paper No. 2007-011. Available at SSRN: http://ssrn.com/abstract=997905 or http://dx.doi.org/10.2139/ssrn.997905

Contact Information

Young-Ro Yoon (Contact Author)
Indiana University Bloomington - Department of Economics ( email )
Bloomington, IN 47405-6620
United States

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