Hard Information Research Articles

Initiative, Incentives, and Soft Information

This paper examines how organizational form affects incentives inside a financial institution. Using unique organization-level data, I exploit a change to the hierarchical organization to test whether delegation of authority and reduction of oversight improve the provision of effort by loan officers. I find that empowering loan officers increases their effort in producing and using soft information in their lending decisions. Consistent with the incentive view of delegation, loan officers who receive more authority rely more on soft information relative to hard information in their decisions than those for whom authority is only partially or not delegated. The results shed light on the importance of organizational design for the production and use of soft information in financial institutions. This paper was accepted by Amit Seru, finance.

Multi-Bit Flipping Decoding of LDPC Codes for NAND Storage Systems

This letter presents a new multi-bit flipping decoding algorithm for low-density parity-check codes, which can enhance hard-information-based decoding performance for NAND storage systems. Since the conventional enhancement techniques developed for bit-flipping decoding require soft information, the long latency taken to generate the soft information, makes it hard to apply them to practical NAND storage systems. The proposed algorithm requires only hard information and achieves the better performance than previous hard-information-based algorithms. The proposed method flips multiple bits in each iteration, but the maximum number of bits to be flipped in an iteration is restricted to prevent overcorrection. To relax the hardware complexity of sorting, in addition, an efficient approximation method is proposed, reducing the hardware complexity of a 512-input sorter by 48.3% without degrading the performance noticeably.

All change for broadband

At the time of writing, the media is full of speculation about the National Broadband Network (NBN), but there is limited hard information available. This article is an attempt to tease out a better understanding of the current developments in telecommunications in Australia. It is a high-level summary of the elements being considered and the policy issues still to be resolved, from the perspective of one interested observer, and as such it is certain to need correction and clarification as more is revealed.The terminology used in this paper is that given in the Appendix, which provides a short tutorial on the current Telecommunications Environment.

The Right to Decide and the Effective Control Over Small Business Lending Decisions: A Look into Loan Officers’ Real Authority

A vast literature has emphasised that small banks are at a comparative advantage in lending to small businesses. In this paper, we show that, in addition to bank size, loan officers’ authority affects banks’ specialisation in small business lending. By using a unique dataset based on a survey of Italian banks, we find that loan officers’ authority has a key role in explaining bank specialisation in small business lending. In particular, banks that delegate more decision‐making power to their loan officers are more willing to lend to small firms than other banks. We use several proxies for measuring loan officers’ authority: their discretion in loan approval and in setting loan interest rates, the amount of money up to which they are allowed to lend autonomously, their turnover, their compensation schemes and the kind of information (soft vs. hard information) used both for screening and monitoring purposes.

On Size Effects in Separate Accounts

Previous research has suggested that information processing and hierarchy costs play a role in firm-level diseconomies of scale. Using separate accounts (SAs) as a laboratory, we examine if these costs vary across investment style (quantitative vs. fundamental) and what role, if any, they play in producing diseconomies of scale. Consistent with lower hierarchy costs, the average investment professional (e.g., portfolio manager, research analyst, and trader) at a quantitative investment advisor manages two to three times more assets than fundamental advisors. Consistent with greater use of hard information and lower information processing costs, the performance of quantitative SAs exhibit higher factor model R2s, and greater stability in factor betas and tracking error after a change in the management team than fundamental SAs. Moreover, we find higher information diffusion speed in quant SA firms than in fundamental firms, also consistent with lower information processing costs. Finally, controlling for liquidity costs, we find the performance of quantitative SAs is unrelated to size, while fundamental SAs exhibit statistically and economically significant diseconomies of scale. Overall, our results suggest that information processing and hierarchy costs are a source of diseconomies of scale in asset management.

Credit ratings, relationship lending and loan market efficiency

PurposeUsing the small-business loan market, this paper aims to test whether a structural shift in access to borrowers’ financial information (i.e. credit ratings) improves market efficiency, thereby improving entrepreneurs’ access to external capital.Design/methodology/approachThis research uses the National Survey of Small Business Finance in a conditional logistic regression framework to tease out the marginal propensity to grant lines of credit given the firm’s credit rating – treating both of the events, namely, line of credit and credit ratings, as endogenous variables. This methodology overcomes potential reverse causality issues.FindingsThe results show that information brokers have allowed small firms to break away from long-term monopolistic lending relationships, thus contributing to more informationally efficient markets. Small businesses benefit from better-informed lenders by having better access to capital. Also, women appear less likely to receive a line of credit even after adjusting for credit ratings.Practical implicationsThis research highlights the importance of credit report awareness/monitoring by entrepreneurs, as the small-business credit rating grows rapidly. Relationship lending is not enough to reach optimal financing costs. These papers call for more regulated credit ratings industry to reduce potential moral hazards.Originality/valueThis paper tests whether bank lending relationships (soft information) still matter after accounting for credit ratings (hard information). Additionally, this study measures the extent to which information sharing by data services bureaus, a proxy for informational efficiency, has increased allocation efficiency in the small-business loan market.

The effect of solid solution treatment on the hardness and microstructure of 0.6%wt C-10.8%wt Mn-1.44%wt Cr austenitic manganese steel

Austenitic manganese steel is steel alloy that has high manganese content (10-14%wt Mn). The characteristics of austenitic manganese steel are good in toughness, ductility, and wear resistance. Effect of solid solution treatment on the hardness and microstructure of austenitic manganese steel was studied in this experiment. The solid solution treatment process of austenitic manganese steel, 0.6%wt C-10.8%wt Mn-1.44%wt Cr, was conducted by heating the material at varied temperatures (950°C, 1000°C, 1050°C) for an hour and then quenching it in two different quenching media, i.e. oil and water. Further, the samples were tempered at three different temperatures (300°C, 400°C, and 500°C) for 2 hours. The treated materials were analyzed by Rockwell Hardness Tester to obtain the information of materials hardness and by an optical microscope and XRD to investigate the microstructure phase of the treated materials. Heating the austenitic manganese steel at 950°C for an hour followed by water quenching dissolved all carbide in as-cast condition and resulted the fully austenitic on its microstructure. Carbide precipitation occurred due to the prolongation of soaking time in solid solution treatment and tempering process. The optimum hardness of sample was 53.3 HRC, which was resulted by heating this material until 1000°C for an hour, followed by water quenching and tempering at 400°C for 2 hours.

Cone beam computed tomography in orthodontics

A new revolution in three-dimensional radiologic advances in dentistry was introduced in the year 1998, as cone beam computed tomography (CBCT). Over the years, it has become an increasingly popular technique in orthodontic diagnosis, treatment planning, and research. This rise in its popularity has been facilitated by the relative advantages of three-dimensional (3D) over 2D radiography. CBCT imaging involves only a minimal increase in radiation dose relative to combined diagnostic modern digital panoramic and cephalometric imaging. A combination of volumetric reconstruction and multiplanar views can provide the orthodontic clinician with skeletal hard tissue, soft tissue, dentition, and airway information. Despite many suggested indications of CBCT, scientific evidence that its utilization improves diagnosis and treatment plans or outcomes has only recently begun to emerge. This article provides a comprehensive review of the application of CBCT in orthodontics. The current indications for CBCT in standard orthodontic diagnosis include impacted teeth, cleft lip, and palate and skeletal discrepancies requiring surgical intervention, root resorption, supernumerary teeth, temporomandibular joint (TMJ) pathology, facial asymmetry, temporary anchorage devices, root morphology and angulation; alveolar boundary conditions; maxillary transverse dimensions and maxillary expansion, and vertical malocclusion. Advanced CBCT software applications can be used to quantify airway space in the cases of obstructive sleep apnea, perform superimpositions to semiquantitatively visualize changes over the hard and soft tissues, including the TMJ and airway.

Mass Media Effects on Trading Activities: Television Broadcasting Evidence from Japan

This study examines how information broadcasting through television (TV) media influences stock market activities. Consistent with the effect of TV information to attract investor attention, we find that increased information flow via TV is significantly associated with greater trading volume and larger price change. Market liquidity (bid–ask spread) is improved for more TV information flows, suggesting that new information arrival in the market widens information asymmetry. As for information type, hard information from business-oriented programs and earnings-related news contributes to the attention effect of media compared with soft information. Finally, the impact of TV is more influential for stocks with more individual shareholders than those with institutional shareholders.

Entrainment, motion, and deposition of coarse particles transported by water over a sloping mobile bed

In gravel-bed rivers, bedload transport exhibits considerable variability in time and space. Recently, stochastic bedload transport theories have been developed to address the mechanisms and effects of bedload transport fluctuations. Stochastic models involve parameters such as particle diffusivity, entrainment and deposition rates. The lack of hard information on how these parameters vary with flow conditions is a clear impediment to their application to real-world scenarios. In this paper, we determined the closure equations for the above parameters from laboratory experiments. We focused on shallow supercritical flow on a sloping mobile bed in straight channels, a setting that was representative of flow conditions in mountain rivers. Experiments were run at low sediment transport rates under steady nonuniform flow conditions (i.e., the water discharge was kept constant, but bedforms developed and migrated upstream, making flow nonuniform). Using image processing, we reconstructed particle paths to deduce the particle velocity and its probability distribution, particle diffusivity, and rates of deposition and entrainment. We found that on average, particle acceleration, velocity and deposition rate were responsive to local flow conditions, whereas entrainment rate depended strongly on local bed activity. Particle diffusivity varied linearly with the depth-averaged flow velocity. The empirical probability distribution of particle velocity was well approximated by a Gaussian distribution when all particle positions were considered together. In contrast, the particles located in close vicinity to the bed had exponentially distributed velocities. Our experimental results provide closure equations for stochastic or deterministic bedload transport models.

Bidirectional Decision Feedback Modified Viterbi Detection (BD-DFMV) for Shingled Bit-Patterned Magnetic Recording (BPMR) With 2D Sectors and Alternating Track Widths

Shingled bit-patterned media (BPM) recording is a promising candidate to improve the magnetic recording density above 1 Tb/in2 while keeping the conventional writer design. However, shingled magnetic recording (SMR) leads to a narrower track pitch, and thus increased inter-track interference motivating the investigation of array readers and 2-D sectors. In this paper, we investigate SMR on BPM with 2-D sectors at the channel density of 3.71 Tb/in2. Use of 2-D sectors allows the possibility of using either hard or soft information from already detected tracks in that 2-D sector to improve the detection performance on the current track. An important question in this context is whether all tracks in a 2-D sector should be of the same nominal width or if there is a potential benefit to using different widths for adjacent tracks. Based on our investigation, we show that alternating track widths [i.e., one less-trimmed (fat) track followed by one more-trimmed (narrow) track] are beneficial to a bit error rate (BER) perspective. In particular, we propose and investigate the use of a bidirectional decision feedback modified Viterbi (BD-DFMV) detector to improve the BER performance. Our simulations indicate that for a hypothetical 2-D sector with 13 tracks and 5% media noise and at the target BER of 10−2, using alternating track widths and readback with a single reader, the BD-DFMV algorithm can provide about 1.6 dB signal-to-noise ratio (SNR) gain, compared with using the same detection algorithm but on a 2-D sector with uniform track widths. When using a reader array instead of a single reader, this SNR gain improves to about 2.0 dB. The alternating track width structure also appears to provide more robustness to track mis-registration compared with the 2-D uniform track width case.

On the error performance of network-coded error-prone DF-relaying in multiple access relay channel

This paper deals with bit error performance analysis of network-coded (NC) multiple access relay channels that operate in the decode and forward mode with error-prone relaying under quasi-static Rayleigh fading channels. It shows that the combination of channel coding and NC relaying can be regarded as a distributed coding scheme (DCS) if the error propagation problem is adequately addressed. For this purpose, methods based on NC soft information relaying (NC-SIR) and NC hard information relaying (NC-HIR) are investigated. In the framework of NC-SIR, the recently proposed Rayleigh-Gaussian log-likelihood-ratio-based Model is used for modelling the soft estimated symbols at the output of the relay soft encoder. The resulting scheme is referred to as NC-SIR-DCS. On the other hand, two NC-HIR-based schemes are studied and analyzed. The first employs automatic repeat request (ARQ) protocols between the relay node and each source node to ensure error-free propagation and is referred to as NC-ARQ-DCS, while the second performs a limiter function at the destination during iterative decoding as introduced in Thobaben (1) distributed and is referred to as NC-LFD-DCS. The SNR of the one-hop link, the equivalent to the sources-relay-destination links, is estimated in the case of NC-SIR-DCS and is lower bounded in the case of NC-LFD-DCS, while in the case of NC-ARQ-DCS, the average SNR cost per information bit due to the ARQ protocol is estimated. These processes allow tractable analysis of the bit error rate performances of the presented network-coded DCSs. Simulation results are carried out to assess the accuracy of the proposed bounds for different relay positions between source nodes and destination.

Forward Looking Versus Backward Looking: An Empirical Study on the Effectiveness of Credit Evaluation System in China's Online P2P Lending Market

A failure of credit evaluation results in increasing default risks in the online P2P lending market. Online P2P lending platforms use both forward-looking and backward-looking credit evaluation mechanisms to assess the credit levels of borrowers. The forward-looking credit evaluation mechanism (FCEM) judges credit levels of borrowers with the uploaded information while the backward-looking credit evaluation mechanism (BCEM) uses the historical repayment performance of borrowers on the platform to assess the credit levels of repeated borrowers. Since not all information uploaded by borrowers reflects the credit ability and the trueness level of borrowers, only the hard information that reflects the credit ability can explain the default risk on the platform under the FCEM. The BCEM based on repeated borrowings produces both promise-enhancing and “fishing” incentives and thus does not significantly reduce the default risk, and weakens the effectiveness of forward-looking credit indicators in explaining the default risk because it encourages borrowers to invest in forging forward-looking credit indicators. Additional information such as the interest rate and the repayment period reveal borrower’s credit and thus can also be used as predictors of borrowers’ default risk. Borrowing data from the Renrendai.com are used to test the effectiveness of various credit evaluation mechanisms.

The Real Costs of Financial Efficiency When Some Information Is Soft

This article shows that improving financial efficiency may reduce real efficiency. While the former depends on the total amount of information available, the latter depends on the relative amounts of hard and soft information. Disclosing more hard information (e.g., earnings) increases total information, raising financial efficiency and reducing the cost of capital. However, it induces the manager to prioritize hard information over soft by cutting intangible investment to boost earnings, lowering real efficiency. The optimal level of financial efficiency is non-monotonic in investment opportunities. Even if low financial efficiency is desirable to induce investment, the manager may be unable to commit to it. Optimal government policy may involve upper, not lower, bounds on financial efficiency.

Credit Supply and Contracting on Hard Information in Debt Markets

We use fair value adoption as a quasi-natural experiment to examine the effect of hard information on credit supply through a contracting channel. After fair value adoption, usage of financial covenants depending on capital-based fair value treatments significantly declined. Capital-based covenant usage by treated borrowers in the financial sector dropped by 7.7% relative to control borrowers. They also experienced an 8.2% relative drop in credit supply, suggesting that the debt contracting space shrunk. Affected borrowers did not compensate with alternative funding sources; they decreased their own lending by 2.8%, propagating these contracting effects to the real economy.

The Ever-Expanding 10-K: Why are 10-Ks Getting so Much Longer (and Does it Matter)?

While characteristics of quantitative accounting data have received substantial attention in the academic literature, much less is known about the accompanying text. We document marked trends in 10-K disclosure over the period 1996-2013, with increases in length, boilerplate, stickiness, and redundancy and decreases in specificity, readability, and the relative amount of hard information. We use Latent Dirichlet Allocation (LDA) to examine specific topics and find that new FASB and SEC requirements explain most of the increase in length and that 3 of the 150 topics — fair value, internal controls, and risk factor disclosures — account for virtually all of the increase. These three disclosures also play a major role in explaining the trends in the remaining textual characteristics. Our results are potentially relevant to regulators in understanding trends in, and topical sources of textual characteristics amid concerns about increasingly onerous accounting disclosures.

Location-Information-Assisted Joint Spectrum Sensing and Power Allocation for Cognitive Radio Networks With Primary-User Outage Constraint

Fifth-generation (5G) wireless networks are expected to achieve 1000 times higher capacity compared with fourth-generation wireless networks. Thus, improving the spectrum efficiency (SE) is a crucial problem, which must be considered. Cognitive radio (CR) is considered an effective approach to alleviate the spectrum scarcity problem. In this paper, based on the location information of the primary transmitter (PT) and the CR network, we estimate the distance between the PT and the secondary transmitter (ST) and then propose a joint spectrum sensing and power allocation (JSS-PA) scheme to improve the SE of the CR network. In the JSS-PA scheme, we focus on jointly optimizing the sensing parameters and the transmit power of the secondary user (SU) such that the SE is maximized, whereas the primary user (PU) outage constraint is satisfied. When cooperative spectrum sensing is employed to detect the PU's status, we analyze two cooperative strategies, i.e., soft information fusion (SIF) and hard information fusion (HIF). Under the SIF strategy, the optimization of sensing and power (S-OSP) algorithm is proposed to maximize the SE. Under the HIF strategy, the optimization of thresholds (H-OT) algorithm is proposed, and then, the optimization of sensing and power (H-OSP) algorithm is proposed to find the optimal duration of local sensing, the optimal transmit power of the SU, and the optimal final decision threshold. Finally, we present the simulation results to evaluate the performance of the proposed JSS-PA scheme and discuss the effects of the optimal parameters on different schemes under SIF and HIF strategies.

Hard Copy Durable Patient Cancer Education Materials: Do They Still Matter?

Traditional hard copy information materials are still present in our cancer clinics. While their actual impact on patient care often goes un-assessed, it is important to understand their role in today's electronic age where information can easily be obtained from various sources. It has remained the practice in our melanoma clinic to provide an information booklet to all of our new patients. The purpose of this study was to evaluate how useful this booklet was, as well as determine the current resources our patients use to gather cancer information. All patients referred to the clinic in the previous 3years were pooled from our prospective, IRB-approved, melanoma sentinel node database. Of these 205 patients, a valid email address was listed for 147. A ten-question survey was emailed to all of these patients, who were not told ahead of time that their experience with the booklet would be studied. Seventy-seven of the 147 (52%) patients polled responded. Fifty-eight (75%) remembered receiving the booklet at their initial consultation. Forty-four (76%) of those patients rated it as extremely or very useful, and no patients reported the booklet as not useful at all. Eighty-eight percent of respondents found the information to be clear and helpful. Sixty-four percent remembered the provider reviewing the material with them, and nearly all of these patients found that helpful. When asked to rank the importance of the various resources for obtaining cancer information, providers were ranked as most important, followed by the information booklet and Internet information sites. Internet blogs and friends and family were rated as the least important sources of information. Even in the current electronic age, our results indicate that information shared by providers, including the hard copy education booklet, was the most important source of information for our newly referred melanoma patients.

A Theory of Hard and Soft Information

We study optimal disclosure via two competing communication channels; hard information whose value has been verified and soft disclosures such as forecasts, unaudited statements and press releases. We show that certain soft disclosures may contain as much information as hard disclosures, and we establish that: (a) exclusive reliance on soft disclosures tends to convey bad news, (b) credibility is greater when unfavorable information is reported and (c) misreporting is more likely when soft information is issued jointly with hard information. We also show that a soft report that is seemingly unbiased in expectation need not indicate truthful reporting. We demonstrate that mandatory disclosure of hard information reduces the transmission of soft information, and that the aggregation of hard with soft information will turn all information soft.

Decision directed iterative channel estimation and Reed–Solomon decoding over flat fading channels

Iterative channel estimation and decoding over flat Rayleigh fading channels have been shown in literature to improve the performance of receivers in wireless communication systems. Turbo and low density parity check codes have mostly been used as the forward error correction (FEC) scheme in the iterative receiver structures. This study proposes a decision directed iterative channel estimation and decoding receiver using Reed–Solomon codes. In particular, the Koetter and Vardy, Reed–Solomon (KV–RS) soft decision decoder is adopted in the receiver structure as the FEC scheme. Two methods of deriving a priori information in joint iterative channel estimation and decoding receiver structures are also analysed in this study. The first method derives the a priori information employing the log likelihood ratio (LLR) method. A priori information derived using the LLR method is mostly used in iterative receiver structures in the literature. The second method derives the a priori information employing the distance metric (DM) method. The DM method is proposed in this study as an alternative approach to the LLR method of deriving a priori information in the iterative receivers. Hard and soft feedback information from the KV–RS decoder is considered to verify the performance of these methods. The performance of the two a priori information methods is documented through computer simulation assuming an M-ary quadrature amplitude modulation system. Simulation results verify the improvement in symbol error rate (SER) performance in the KV–RS iterative receiver structure in comparison with the KV–RS receiver without feedback. Also, the proposed DM method exhibits the same SER performance in comparison with the LLR method which is mostly used in the literature. More importantly, the proposed DM method has the advantage of less computational delay and time complexity compared with the LLR method.