Universität Bonn

Department of Economics

BGSE Workshop

Francisco Poggi (University of Mannheim) 02.11.2022

This paper studies the dynamic completion of interrelated projects. A decision maker allocates, at each point in time, a fixed unit of attention to projects that are completed in the form of breakthroughs. The agent's final payoff depends on the set of completed projects at the chosen stopping time. After completing a project, the agent might regret the attention that was already allocated to an incomplete project. I construct a partial order in the set of allocation policies that is based on regret, and show that the expected payoff of an allocation policy is increasing in such order. Moreover, I provide sufficient conditions in the distribution of completion times such that the optimal policy for complementary projects is regret-free. I apply these results to study the canonical problem of two complementary projects with uncertain but constant rate of completion and characterise the optimal attention allocation policy in that case.
Wednesday, 02.11.22 - 12:00 PM - 01:00 PM
The Timing of Complementary Innovations
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Juridicum, Reinhard Selten Room (0.017)
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