Essays on strategic experimentation

This dissertation includes three essays on strategic experimentation. In Chapter 2, we investigate a game of strategic experimentation that also appears in Bolton and Harris (1999). The setting is a two-player continuous-time two-armed bandit problem. We will show that there is no mixed strategy equilibrium and that there are only two asymmetric pure strategy equilibria, both of which are simple in nature. In so doing, it will be shown that this game is a kind of simple coordination game. We will also show that the asymmetric equilibria are robust for a wide range of parameters against the perturbations in the noise structure. Based on this result, we argue that even in the symmetric game with a homogeneous noise structure, the focus of the analysis should be on the asymmetric equilibria, not on the symmetric equilibrium that was studied in Bolton and Harris (1999).; In Chapter 3, we will investigate the possibility that the inefficiency in Chapter 2 could be overcome by market competition. Two competing firms are now supplying the two options. It will be shown that results vary according to whether or not consumers are homogeneous. If all the consumers have the same abilities to evaluate the uncertain product, it is possible to achieve the efficient outcome. If the consumers have heterogeneous abilities, then it is impossible to achieve the efficient outcome.; In Chapter 4, we turn to discrete-time models. Unlike continuous-time set up, we can provide a general model of multi-player multi-armed bandit problems in discrete-time set up. Under the assumption of perfect observability, we will generalize Section 2.2 in Berry and Fristedt (1985) to n player case. Then, we will show that there exist pure Markov strategy equilibria.