The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Learning to Wait: A Laboratory Investigation
Abstract
Human subjects decide when to sink a fixed cost C to seize an irreversible investment opportunity whose value V is governed by Brownian motion. The optimal policy is to invest when V first crosses a threshold V* = (1 + w*)C, where the wait option premium w* depends on drift, volatility, and expiration hazard parameters. Subjects in the Low w* treatment on average invest at values quite close to optimum. Subjects in the two Medium and the High w* treatments invested at values below optimum, but with the predicted ordering, and values approached the optimum by the last block of 20 periods.
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“For instance, Oprea et al. (2009) and Sandri et al. (2010) study circumstances under which individuals optimally (de)-invest in assets, the prices of which evolve according to binomial tree models.”
From Copy Trading (2020) · cites this paper as Oprea et al. (2009)
Citations
Cites
Dixit, R. K., & Pindyck, R. S. (1994) · doi:10.1515/9781400830176 · Cited by 9,029
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Cited by
Sorted by citations
Apesteguia, J., Oechssler, J., & Weidenholzer, S. (2020) · Management Science · doi:10.1287/mnsc.2019.3508 · Cited by 54
Metadata
- Authors
- OPREA, R., FRIEDMAN, D., & ANDERSON, S. T.
- Affiliations
- University of California System (US)
- United States Geological Survey (US)
- Venue
- Review of Economic Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2009-07
- Volume
- 76
- Issue
- 3
- Pages
- 1103-1124
- ISSN
- 0034-6527 (ISSN-L)
- 1467-937X
- OpenAlex
- W3124622064
- Cited by
- 65
- References
- 1
- Citations by year
- 2026: 3 · 2025: 1 · 2024: 2 · 2023: 2 · 2022: 3 · 2021: 4 · 2020: 4 · 2019: 5 · 2018: 3 · 2017: 2 · 2016: 5 · 2015: 5 · 2014: 7 · 2013: 7 · 2012: 7
- FWCI
- 6.77
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Review of Economic Studies (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- HighWire Press Open Archive (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Capital Investment and Risk Analysis
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Experimental Behavioral Economics Studies
- Keywords
- irreversible investment, optimal investment timing, Brownian motion, fixed costs, behavioral decision making, learning over time
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- OPREA, R., FRIEDMAN, D., & ANDERSON, S. T. (2009). Learning to Wait: A Laboratory Investigation. Review of Economic Studies. https://doi.org/10.1111/j.1467-937x.2009.00543.x
