Decision errors and the value of pre-commitment

Posted on Mon 18 March 2024 in Research • Tagged with quantal choice, commitment, flexibility, noisy decisions

Firms employ stage-gates where information is evaluated before deciding to continue resource commitment toward a project. This approach, wherein investments are not fully ex-ante allocated, has the benefit of being more flexible and deferring resource commitments till better information is available. Still, does such flexibility come at a cost? One …


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