I. Introduction, 263. — II. Developments in normative group decision theory, 264. — III. Questions and an experiment, 267; assumption of a group of rational individuals, 267; two experimental problems: the rational team and the foundation, 268. — IV. The results, 271. — V. Summary and conclusions, 276.

T HE econometric study described here is an attempt to discover and explain patterns in the rate of commercial construction. It focuses on the construction of office buildings and retail stores, which together account for some 85 per cent of the total. Models constructed on the basis of cross-section analysis are fitted with aggregate time-series data. In the cross section, office construction is studied for the central city and metropolitan ring of 13 of the country's largest standard metropolitan areas (SMSA's) and store construction for 18. The time-series analysis is based on national data for metropolitan areas and covers the 11year period 1949-1959. Two previous studies of the industry provided the theoretical foundation for the models developed.' A third reported the cross-section analysis separately.2 The results presented here are consistent with those ideas presented in the previous work. The analysis is divided into four phases. In the first, the basic hypothesis is stated and modified to exploit characteristics peculiar to the industry. In the second and third the empirical work is described and evaluated. In the fourth, conclusions are summarized.

This is the definitive examination of strategic investment from the viewpoint of the people who run the company - the CEO and principal officers. It includes four case histories that follow specific investment projects from their inception to their approval by top management. It is A Harvard Business School Classics Edition.