This paper provides an explanation for why the sunk cost bias persists among firms in a competitive environment in which rich learning possibilities are allowed. We envision firms that experiment with cost methodologies that are consistent with real-world accounting practices, including ones...

Conventional (single-prior) Bayesian games of incomplete information are limited in their ability to capture the extent of informational asymmetry. In particular, they are not capable of representing complete ignorance of an uninformed player about an unknown parameter of the environment. Using...

DAVID A. BESANKO Northwestern University, Kellogg School of Management RONALD R. BRAEUTIGAM Northwestern University, Department of Economics with Contributions from Michael J. Gibbs The University of Chicago, Booth School of Business WILEY WflLEY ft SOWS, INC. ...