Asymmetric Distribution Of Information Research Articles

OUT-LICENSING IN MARKETS WITH ASYMMETRIC INFORMATION: THE CASE OF THE PHARMACEUTICAL INDUSTRY

Few large pharmaceutical companies have recently discovered out-licensing of terminated R&D results as a way to recoup some of the significant investments made in R&D and to improve R&D productivity. Our empirical investigation reveals that the licensing partners are preferably young, small and highly specialized companies. This reverses the traditional logic of out-licensing. While out-licensing is usually done because of downstream concerns, our analysis shows that the company which owns the necessary assets for further development (the large pharmaceutical company) sells the license to a firm (the small partner company) which has — at the time of deal closure — no track record to prove its ability to successfully develop the compound. As the lack of a track record does not allow the pharmaceutical company to distinguish between the partner firms based on their development capabilities, these out-licensing deals are characterized by an asymmetric distribution of information. The application of the theory of adverse selection allows deriving managerial recommendations along three dimensions of the out-licensing deal: product coverage, price setting and performance presumption. By making changes along these dimensions, R&D managers are able to reduce the information asymmetry and approximate an equilibrium in the out-licensing market.

Experimental asset markets with endogenous choice of costly asymmetric information

Asymmetric distribution of information, while omnipresent in real markets, is rarely considered in experimental financial markets. We present results from experiments where subjects endogenously choose between five information levels (four of them costly). We find that (i) uninformed traders earn the highest net returns, while average informed traders always perform worst even when information costs are not considered; (ii) over time traders learn to pick the most advantageous information levels (full information or no information); and (iii) market efficiency decreases with higher information costs. These results are mostly in line with the theoretical predictions of Grossman and Stiglitz (Am. Econ. Rev. 70:393–408, 1980) and provide additional insights that studies with only two information levels cannot deliver.

The agency problem and medical acting: an example of applying economic theory to medical ethics

In this article, the authors attempt to build a bridge between economic theory and medical ethics to offer a new perspective to tackle ethical challenges in the physician-patient encounter. They apply elements of new institutional economics to the ethically relevant dimensions of the physician-patient relationship in a descriptive heuristic sense. The principal-agent theory can be used to analytically grasp existing action problems in the physician-patient relationship and as a basis for shaping recommendations at the institutional level. Furthermore, the patients' increased self-determination and modern opportunities for the medical laity to inform themselves lead to a less asymmetrical distribution of information between physician and patient and therefore require new interaction models. Based on the analysis presented here, the authors recommend that, apart from the physician's necessary individual ethics, greater consideration should be given to approaches of institutional ethics and hence to incentive systems within medical ethics.

STRATEGIES FOR AVOIDING ASYMMETRIC INFORMATION IN CONSTRUCTION PROJECT MANAGEMENT

A construction project is characterized by a high number of project participants and a multitude of contract relations. The Principal Agent Theory deals with the design of contracts, especially with respect to asymmetric information. Asymmetric distribution of information in co‐operations can have effects before as well as after closing a contract. In construction project management therefore attention has to be paid to where information imbalances occur. Several methods are known with which one can cope with the resulting problems but which in turn cause costs.

She2p Is a Novel RNA Binding Protein with a Basic Helical Hairpin Motif

Selective transport of mRNAs in ribonucleoprotein particles (mRNP) ensures asymmetric distribution of information within and among eukaryotic cells. Actin-dependent transport of ASH1 mRNA in yeast represents one of the best-characterized examples of mRNP translocation. Formation of the ASH1 mRNP requires recognition of zip code elements by the RNA binding protein She2p. We determined the X-ray structure of She2p at 1.95 Å resolution. She2p is a member of a previously unknown class of nucleic acid binding proteins, composed of a single globular domain with a five α helix bundle that forms a symmetric homodimer. After demonstrating potent, dimer-dependent RNA binding in vitro, we mapped the RNA binding surface of She2p to a basic helical hairpin in vitro and in vivo and present a mechanism for mRNA-dependent initiation of ASH1 mRNP complex assembly.

Perception of words and non-words in the upper and lower visual fields

The findings of previous investigations into word perception in the upper and the lower visual field (VF) are variable and may have incurred non-perceptual biases caused by the asymmetric distribution of information within a word, an advantage for saccadic eye-movements to targets in the upper VF and the possibility that stimuli were not projected to the correct retinal locations. The present study used the Reicher–Wheeler task and an eye-tracker to show that, using stringent methodology, a right over left VF advantage is observed for word recognition, but that no differences were found between the upper and the lower VF for either word or non-word recognition. The results are discussed in terms of the neuroanatomy and perceptual abilities of the upper and the lower VF and implications for other studies of letter-string perception in the upper and the lower VF are presented.

Equal Contributions and Unequal Risks in a North-east Thai Village Funeral Society

Village funeral societies in north-east Thailand collect equal contributions from all participating households, even though some households are much more likely to experience deaths and receive money from the funeral society than others. The societies' use of the equal contributions rule is not an outcome of the asymmetric distribution of information on risks. It reflects, instead, an ambivalence over the relevance of expected returns, a willingness to subsidise fellow villagers, and the need to maximise simplicity and transparency to safeguard against mismanagement and corruption. The equal contributions rule is efficient, in that it leads to low administrative costs, has no clearly superior alternatives, and creates only minor adverse selection.

Triumph und Grenzen des Marktes

Abstract While markets are important mechanisms for coordination of social exchange it has to be looked at their limits and preconditions as well. This paper advocates three claims: First, under conditions of externalities and asymmetric distribution of information the eflicient functioning of markets depends on non-market institutions. Second, social limitations of the expansion of markets reflect a value-realm in which society constitutes itself. These values, though they change, are normatively immune against efficiency consideration. Third, the rational-actor model of economics is insufficient for the understanding of the non-rational preconditions of markets and the embeddedness of markets in social values.

Using group support systems to discover hidden profiles: an examination of the influence of group size and meeting structures on information sharing and decision quality

This paper reports on an experimental study of information sharing for groups using a group support system (GSS). A group member's success or failure in sharing unique information can have important impacts on meeting outcomes. This research builds on previous work which has examined various factors that impact information-sharing performance. To examine these issues, groups processed a hidden profile task, i.e. a task with an asymmetrical distribution of information. In addition, group size (groups of four and seven) and the level of structure (structured or unstructured agenda) were manipulated. Results show that group size had no effect on information sharing. However, groups using the structured agenda shared more initially-shared information and initially-unshared information. Although no relationship was found between information-sharing performance and decision quality, a curvilinear (U-shaped) relationship between information sharing and satisfaction was observed. These results show that, for hidden-profile tasks, a critical performance level must be reached before performance is positively related to satisfaction. The paper concludes with a discussion of the findings and the implications for future research and use.

AN ASYMMETRIC INFORMATION APPROACH TO THE COMPARATIVE ANALYSIS OF PARTICIPATORY AND CAPITALIST FIRMS

THIS paper argues that in the analysis of capitalist, labour-managed and participatory firms, it is useful to explain of the differences between them in terms of the different distribution of information they are likely to possess. In particular, it will be argued that capitalist firms are likely to have a much more asymmetric distribution of information among members of the firm, than well-designed labour-managed firms. An emphasis on information in the literature on participation is not entirely new. For example, the Bullock Committee on Industrial Democracy in Britain (1977, p. 42) wrote that some submissions to us regarded the question of provision of information as central to the discussion of industrial democracy. The distinctive feature of the treatment of information here is that it is based on an explicit theoretical model developed in Manning (1986) where it is argued that it can be profitable to hide information. The usefulness of this approach lies in three main areas. First, it can provide an explanation of the empirical finding that participatory firms are at least as efficient as capitalist firms yet do not seem to be widespread in predominantly capitalist economies. Most theoretical models explaining the superior efficiencies of participatory arrangements cannot explain why such arrangements would not be introduced by a profit maximising capitalist. Second, many theories of participation (e.g. Svejnar, 1982a, b) model it as increasing the bargaining power of workers relative to management and share-holders. But in many cases, the precise mechanism of this is not made clear. The analysis of participation here suggests that if it transfers information from managers to workers it will increase the workers share of the surplus, not by altering the bargaining solution concept, but by altering the set of feasible outcomes in a manner favourable to workers. Third, the stability of labour-managed firms may have an informational aspect, in that the organisation may revert to a capitalist form if group within the firm manages to generate private information for itself. It is argued that this is likely to be particularly relevant for small participatory

INFORMATION ASYMMETRIES IN BASEBALL'S FREE AGENT MARKET

This study examines whether baseball's free agent market has been characterized by an asymmetric distribution of information among clubs. It is argued that the clubs for which players have performed have more information with which to estimate the players' future performance than do clubs that have not employed the player. Evidence is presented which shows that free agents spend more time on the disabled list than non‐free agents. Over time it appears that club owners have adjusted their expectations of free agent performance.

Asymmetrical Information in Securities Markets and Trading Volume

Unequal costs of obtaining and processing information may lead to trading of securities and wealth redistributions among investors. Those investors with easy access to information about a firm may be able to profit from prior knowledge of the information before public release. Public policy making bodies such as the SEC have attempted to alleviate this phenomenon by promoting public disclosure of information through litigation and regulation of the trading activities of insiders. Whether these procedures have been successful in curtailing trading due to privileged information is still open to debate. Academicians have also been concerned with resolving the existence of asymmetrically distributed information and “efficient markets.” In spite of the social and academic importance of this phenomenon, there has been little empirical work in this area. This is primarily due to a lack of a testable theoretical framework explaining investor behavior in securities markets with asymmetric information distribution. The ensuing paper provides a tentative testable theory on trading in markets with asymmetrically distributed information as well as an empirical investigation of this theory.