Microeconomics: Asymmetric & Private Information eJournal最新文献

{"title":"Salience and Information Asymmetry","authors":"Elias Carroni, A. Mantovani, Antonio Minniti","doi":"10.2139/ssrn.3483514","DOIUrl":"https://doi.org/10.2139/ssrn.3483514","url":null,"abstract":"In this paper we study optimal price setting by a seller that offers a supposedly higher-quality product in a market where a good of standard quality is already available. Consumers do not directly observe the quality of the product and their purchasing decisions are distorted by salient thinking. Consumer attention can be directed towards the product attribute - quality or price - that stands out in the market. We show that separation takes place only if the salience bias is moderate. Instead, if the salience bias is sufficiently strong, the seller prefers to set a low price to mitigate the detrimental effects of price salience, even though this strategy may not lead to separation. Our analysis suggests that the interplay between asymmetric information and salient thinking may provide an explanation for why price differences observed in markets do not always reflect quality differences.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134132188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Asymmetric Information and the Pecking (Dis)Order","authors":"P. Fulghieri, Diego García, D. Hackbarth","doi":"10.2139/ssrn.2024666","DOIUrl":"https://doi.org/10.2139/ssrn.2024666","url":null,"abstract":"In this paper we show that when growth options represent a significant component of overall firm value, equity financing can dominate (i.e., be less dilutive than) debt financing under asymmetric information. In particular, we find that equity is more likely to dominate debt for younger firms with larger investment needs and with riskier growth opportunities. Thus, our model can explain why high-growth firms may prefer equity over debt, and then switch to debt as they mature. We also fid that equity financing is relatively more attractive when a firm already has debt in its capital structure. In addition, equity can dominate debt in multidivisional firms. Finally, we provide new predictions on the cross-sectional variation of capital structures.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"72 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126715514","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Can Audits Deter Performance Exaggeration?","authors":"Prithwiraj Mukherjee, Souvik Dutta, A. Anand","doi":"10.2139/ssrn.3521203","DOIUrl":"https://doi.org/10.2139/ssrn.3521203","url":null,"abstract":"Exaggeration of performance metrics (revenue, product efficacy, ad viewership, etc.) by entrepreneurs to investors and clients is a common problem in high tech entrepreneurship. We model this as a principal-agent problem in a contract-theoretic setting, where the entrepreneur (agent) can undertake costly actions to strategically lie about a key performance metric (agent type) in order to extract higher payment from the investor (principal). We demonstrate that the optimal contract features widespread exaggeration by all entrepreneur types, and the investor exploits it as a screening mechanism to ordinally rank the entrepreneur by his true underlying type. We study the effect of an audit in which, if caught cheating, the agent pays a penalty. We show that rather than deterring fraud, audits actually amplify the degree of exaggeration.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131298459","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Do Sell-Side Analysts Say “Buy” While Whispering “Sell”?","authors":"Yushui Shi","doi":"10.2139/ssrn.3445084","DOIUrl":"https://doi.org/10.2139/ssrn.3445084","url":null,"abstract":"I examine how sell-side equity analysts strategically disclose different information to the public and buy-side mutual fund managers to whom they are connected. I specifically test the possibility that analysts’ public recommendations tell the public to “buy” but they are whispering “sell” to their connected fund managers. I measure the likelihood of such “say buy/whisper sell” behavior based upon the percentage of managers’ selling stocks that analysts recommend buying. Using mutual fund managers’ votes for sell-side analysts in a Chinese “star analyst” competition as a proxy for managers’ evaluations of analysts, I find that managers are more likely to vote for the analysts who exhibit more say buy/whisper sell behavior with these managers. This result suggests that managers receive more-precise information in private communications with an analyst than in the analyst’s public recommendations and reward the favor by voting for the analyst in the “star analyst” competition. This different information disclosure by analysts results in a form of information asymmetry, which incurs a significant cost on uninformed investors; among analysts’ positive recommendations, the stocks bought by the managers who vote for the analysts outperform the stocks sold by these managers around the recommendation dates.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123715516","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Private Debt Renegotiation and Financial Institutions’ Network","authors":"Christophe J. Godlewski, B. Sanditov","doi":"10.2139/ssrn.3530002","DOIUrl":"https://doi.org/10.2139/ssrn.3530002","url":null,"abstract":"We study the influence of financial institutions’ network on private debt renegotiation outside of distress. Lenders with a network-central position have access to superior private information, are more experienced and trustworthy and have a greater reputational capital. Using a large sample of more than 10.000 loans issued in 25 European countries we find that network-central lenders have a significant influence on the renegotiation process. Such lenders increase the likelihood of renegotiation, the number of renegotiation rounds, and the number of amendments to the loan agreement. Our findings survive multiple robustness checks and confirm that access to superior information, greater experience, reputation, and trust encourages private debt renegotiation.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"234 5","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120889625","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"How Do Financial Contracts Evolve for New Ventures","authors":"T. Jenkinson, Christian Rauch, Danying Fu","doi":"10.2139/ssrn.3512304","DOIUrl":"https://doi.org/10.2139/ssrn.3512304","url":null,"abstract":"While previous research has characterized the key features of contracts between entrepreneurs and venture capitalists, little is known about how these contracts evolve over the life of new ventures. We overcome significant data challenges to compile a novel panel dataset of U.S. early-stage ventures that includes, for every company in our sample, the main financial and control rights offered to investors at each equity round. We also gather information on the characteristics of the investors and founders at each funding round. Regarding the terms associated with the first funding round, we find that in around 60% of early-stage ventures, the initial ‘Series A’ financing terms are very similar across companies. We refer to this as the default contract. Where deviations from this default contract occur, the terms are usually more investor-friendly. We then track how contractual terms evolve over funding rounds using a 3-direction classification. The ‘diagonal’ analysis compares the original share rights given to investors of each funding round at the time of the closing of each respective funding round. The ‘vertical’ dimension analyses how the rights of existing share classes are changed upon the introduction of new share classes at the closing of subsequent funding rounds. The ‘horizontal’ analysis compares the rights of all existing share classes at a given point in time. For successful companies, which have not suffered down-rounds, the default contract is often maintained across funding rounds. In such cases, we argue that post-money valuations can be a reasonable proxy for the economic value of the firm.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131701434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Fiduciary Duties on the Temporal Edges of Agency Relationships","authors":"Deborah A. DeMott","doi":"10.2139/ssrn.3496858","DOIUrl":"https://doi.org/10.2139/ssrn.3496858","url":null,"abstract":"The duties that principals and agents owe each other are typically coterminous with the agency relationship itself. But sometimes temporal lines of clean demarcation do less work. The Chapter identifies situations in which an agent may owe duties-including fiduciary duties-to the principal prior to the formal start of their relationship, including any enforceable contract between the parties. Likewise, not all duties principals and agents owe each other end with the relationship. The Chapter identifies the rationales for duties at the temporal peripheries for an agency relationship and the extent to which they are derived from doctrines distinct from agency law. Issues in some contexts are amenable to resolution through bright-line determinations; others require nuanced and fact-specific inquiry. \u0000 \u0000Issues that arise at the periphery of termination are complicated as a consequence of a distinct feature of agency relationships: both principal and agent hold ongoing power to terminate the relationship, albeit in breach of contract. Neither owes the other a duty of disclosure to the other concerning plans to terminate, including in most instances the agent's preparations to compete with the principal post-termination. And in the midst of agency relationships, agents, like principals, may negotiate to further their own interests, whether to continue the relationship under modified terms or bring it to an end. \u0000 \u0000These structural consequences of agency require tempering either the claims to generality or the content of some theoretical accounts of fiduciary relationships more broadly, particularly those stressing the cognitive dimensions of agents' loyalty and demanding robust commitment from the agent. Agency law, which tolerates both preparations to compete post-termination as well as unilateral and undisclosed strategizing over exit, accommodates relationships between competent parties who may bargain on an interim basis to adjust the terms of their relationship. In this respect, as in others, agency relationships do not much resemble donative trusts, the assumed prototypes of many theoretical accounts of fiduciary relationships. Additionally, the quotidian and ubiquitous character of agency relationships lends these issues practical significance.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"111 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129284239","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Role of Information in the Discrepancy Between Average Prices and Expectations","authors":"António M.R.G. Barbosa","doi":"10.2139/ssrn.3501152","DOIUrl":"https://doi.org/10.2139/ssrn.3501152","url":null,"abstract":"Abstract In this paper I show how the existence of short-term trading causes a divergence between the average price and the average expectation of the fundamental value by embedding higher-order expectations –expectations of expectations of expectations...– into prices. Short-term trading arises when investors receive private information and (i) either net supply mean reverts or (ii) the release of additional information related to existing information is combined with residual uncertainty. Mean-reversion of net supply, brings the average expectation closer to the fundamental value than the average price after the release of private information. By the contrary, residual uncertainty and an incoming release of information brings the average price closer to the fundamental value than the average expectation before the new information is released. When both (i) and (ii) are present, the average expectation tends to be closer to the fundamental value than the average price in the periods immediately after information releases, but the opposite happens in the periods immediately before information releases.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127295952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Inputs, Incentives, and Self-Selection at the Workplace","authors":"Francesco Amodio, Miguel A. Martínez-Carrasco","doi":"10.2139/ssrn.3510451","DOIUrl":"https://doi.org/10.2139/ssrn.3510451","url":null,"abstract":"This paper studies how asymmetric information over inputs affects workers' response to incentives and self-selection at the workplace. Using daily records from a Peruvian egg production plant, we exploit a sudden change in the worker salary structure and find that workers' effort, firm profits, and worker participation change differentially along the two margins of input quality and worker type. Firm profits increase differentially from high productivity workers, but absenteeism and quits of these workers also differentially increase. Evidence shows that information asymmetries over inputs between workers and managers shape the response to incentives and self-selection at the workplace.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127416334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Censorship as Optimal Persuasion","authors":"A. Kolotilin, Tymofiy Mylovanov, Andriy Zapechelnyuk","doi":"10.2139/ssrn.3501474","DOIUrl":"https://doi.org/10.2139/ssrn.3501474","url":null,"abstract":"We consider a Bayesian persuasion problem where a sender's utility depends only on the expected state. We show that upper censorship that pools the states above a cutoff and reveals the states below the cutoff is optimal for all prior distributions of the state if and only if the sender's marginal utility is quasi‐concave. Moreover, we show that it is optimal to reveal less information if the sender becomes more risk averse or the sender's utility shifts to the left. Finally, we apply our results to the problem of media censorship by a government.","PeriodicalId":119201,"journal":{"name":"Microeconomics: Asymmetric & Private Information eJournal","volume":"158 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114538641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}