eprintid: 22372 rev_number: 22 eprint_status: archive userid: 1482 importid: 105 dir: disk0/00/02/23/72 datestamp: 2016-09-19 07:30:40 lastmod: 2021-10-27 13:36:53 status_changed: 2018-03-26 13:34:57 type: article succeeds: 16895 metadata_visibility: show creators_name: Bobtcheff, Catherine creators_name: Levy, Raphaël creators_idrefppn: 241586550 title: More Haste, Less Speed? Signaling through Investment Timing ispublished: pub subjects: subjects_ECO abstract: We consider a real option model in which a cash-constrained entrepreneur learns prior to investing, but at a speed which is private information. The entrepreneur seeks outside funding, and uses the timing of his investment to signal his confidence in the venture, and accordingly obtain cheaper credit. In the benchmark case with no informational friction, we show that the optimal investment date may be nonmonotonic or decreasing in the learning speed, depending on the prior NPV of the project: better learning increases the value of the option to wait, but also increases the speed of updating. In the presence of asymmetric information, the cash constraint may result in distortions in investment timing, and the inefficiency is higher the more stringent the cash shortage. Inefficient investment policy may take both the form of hurried investment (as compared to the benchmark), when both entrepreneur types learn suficiently fast, and of delayed investment, when the slow-learning type does not learn fast enough. Therefore, the severity of the cash constraint affects the magnitude of the timing distortion, but not its direction. date: 2017-08 date_type: published publisher: American Economic Association official_url: http://tse-fr.eu/pub/30837 faculty: tse divisions: tse keywords: Signaling keywords: investment timing keywords: financing of innovation keywords: real options language: en has_fulltext: TRUE view_date_year: 2017 full_text_status: public publication: American Economic Journal: Microeconomics volume: 9 number: 3 place_of_pub: Nashville, TN pagerange: 148-86 refereed: TRUE issn: 1945-7669 oai_identifier: oai:tse-fr.eu:30837 harvester_local_overwrite: oai_set harvester_local_overwrite: faculty harvester_local_overwrite: issn harvester_local_overwrite: publisher harvester_local_overwrite: place_of_pub harvester_local_overwrite: creators_idrefppn oai_lastmod: 2018-01-19T10:51:50Z oai_set: tse oai_set: ut1c site: ut1 citation: Bobtcheff, Catherine and Levy, Raphaël (2017) More Haste, Less Speed? Signaling through Investment Timing. American Economic Journal: Microeconomics, 9 (3). pp. 148-86. document_url: https://publications.ut-capitole.fr/id/eprint/22372/1/wp_tse_571.pdf