Situation Of Information Asymmetry Research Articles

Study of the Impact of Fairness Concern on Low Carbon Dual Channel Supply Chain

A supplier-dominated secondary low-carbon dual channel supply chain is used as the object of study, and the expected demand function is constructed when the seller has the advantage of market information in the information asymmetry situation, in order to explore the impact of fairness concern on supply chain decision making. The utility functions in the three scenarios were analyzed and compared, and mathematical simulations were conducted according to market demand information available to the seller and the effort input of decision-making subject. Studies have shown that: Whichever decision-making subject has the fairness concern behavior does not affect the supplier as a higher profit maker; information on market demand also needs to be taken into account when considering the impact of the level of fairness concern on profits of the decision maker. When suppliers misjudge market demand, wholesale price increases are slowed if sellers have equity concerns, and sellers may engage in retaliatory behavior if equity demands are not met. In addition, low carbon demand is profitable for suppliers in supplier-led supply chains regardless of market demand, and low carbon sales efforts are not necessarily profitable for retailers.

Frontier-based incentive mechanisms for allocating common revenues or fixed costs

In practice, allocating common revenues or fixed costs is a common practice in multi-unit organizations to motivate subunits to improve performance. Recently, Dai et al. (2021, EJOR) developed an incentive approach for allocating common revenues or fixed costs. We identify two shortcomings of their approach and propose two frontier-based incentive mechanisms for allocating common revenues or fixed costs. First, the incentive common revenue allocation (ICRA) and incentive fixed cost allocation (IFCA) are conceptualized. On the basis of ICRA and IFCA, the generalized incentive efficiency measures that satisfy strong monotonicity and self-excluded in technology are identified to evaluate subunit performances. To seek for incentive efficiency measures, several ex-post technologies with frontier change rate (FCR) are considered. Different technologies are formulated for the information asymmetry situation, in which FCR is not available to subunits when they select production mixes, and the information symmetry situation, in which FCR is available to subunits when they select production mixes. We elucidate that the formulated technologies are applicable to derive corresponding incentive efficiency measures. ICRA and IFCA are then obtained via the concept of efficiency proportion. Subsequently, the mechanisms for information asymmetry situation and information symmetry situation are summarized, and several theorems and interesting observations of the proposed mechanisms are reported. Finally, we illustrate our proposed mechanisms for allocating common revenues or fixed costs using data from a home appliance enterprise in China.

Do risk attitude and trust moderate bank managers' risk perceptions in lending to micro, small, medium enterprises?

PurposeThe purpose of this research is to study the antecedents of risk perceptions of bank managers towards micro, small, medium enterprise (MSME) lending, in the situation of information asymmetry, where cognitive factors assume significance over organisational norms of lending.Design/methodology/approachThis study proposed and tested a conceptual model based on the factors identified from literature review and exploratory and quantitative study. Multinomial logistic regression technique is used for quantitative analysis.FindingsThe research postulates that information asymmetry, risk attitude, perceived trust and organizational norms have a significant relationship with branch managers' perceived risk in lending to MSMEs. The research emphasized that the risk attitude of managers and perceived trust moderate the relationship between information asymmetry and perceived risk. The findings and discussions enrich the knowledge about the alleviators of constraints to MSME funding in developing nations despite information asymmetry.Originality/valueAuthors have given holistic view on the risk perception in the financial decision-making process of bank lending. The research highlights the importance of cognitive factors in decreasing the negative impact of information asymmetry on risk perception.

Analysis and impact of COVID-19 disclosures: is IT-services different from others?

PurposeThere is ambiguity regarding whether coronavirus disease 2019 (COVID-19) is a boon or bane for the IT services industry. On the one hand, it has created opportunities, especially with the growth of collaborative technologies. On the other hand, many firms have reduced their IT budgets owing to the ongoing recession. This study explores how IT firms have assessed the risk of the pandemic in the early days and informed capital market participants. In addition, it examines the impact of such online disclosures on information asymmetry.Design/methodology/approachThe authors analysed annual reports of publicly listed firms in the USA filed on the Securities and Exchange Commission website in 2020 and examined whether the disclosure scenario of technology firms was different from that of the other industries. Moreover, the risk sentiment of COVID-19-related disclosures was assessed by employing text analytics. Information asymmetry was measured using the bid–ask spread.FindingsOverall, it was found that IT services firms were less likely to discuss the COVID-19 pandemic in their annual reports. Interestingly, it was observed that technology firms that chose to communicate about the pandemic had a lower incidence of words related to risks. Furthermore, communicating about COVID-19 in annual reports calms investors and improves the information asymmetry situation about the firm. Variation in the severity of the pandemic and the responses of state governments was controlled for by employing state-fixed effects in the empirical models.Originality/valueThe authors inform the literature on corporate disclosures and technology and highlight the importance of effectively communicating about the pandemic.

GuessWhich? Visual dialog with attentive memory network

Visual dialog is a task that two agents: Question-BOT (Q-BOT) and Answer-BOT (A-BOT), which communicate in natural language on the situation of information asymmetry. Q-BOT generates questions based on an image caption and a historical dialog. A-BOT answers the questions grounded on the image. Moreover, we play a cooperative ‘image guessing’ game between Q-BOT and A-BOT, so that Q-BOT can select an unseen image from a set of images. However, as the valid information of the image caption and the historical dialog fades along the interaction, existing methods usually generate irrelevant and homogenous questions, which are worthless to the visual dialog system. To tackle this issue, we propose an Attentive Memory Network (AMN) to fully exploit the image caption and historical dialog information. Specifically, the attentive memory network mainly consists of a memory network and a fusion module. The memory network holds long term historical dialog information and gives each round of the dialog a different weight. Aside from the historical dialog information, the fusion module in Q-BOT and A-BOT further uses the image caption and the image feature, respectively. The caption information assists Q-BOT with the attentive generation of the questions, and the image feature helps A-BOT produce precise answers. With the AMN, the generated questions are diverse and concentrated, and the corresponding answers are accurate. The experimental results on VisDial v1.0 show the effectiveness of our proposed model, which outperforms the state-of-the-art methods.

An Optimal Seed Scheduling Strategy Algorithm Applied to Cyberspace Mimic Defense

Cyberspace mimic defense (CMD) is an active defense theory that has emerged in recent years. By dynamically constructing and scheduling multiple executors, the CMD can not only effectively defend against security threats caused by unknown cyberspace weaknesses, but also improve the present situation of information asymmetry between attack and defense in cyberspace. However, as one of the key technologies of the CMD, the scheduling strategy algorithm still needs to be improved in real-time security, reliability, and universality, which has restricted the development and large-scale deployment of the CMD. To solve this problem, we propose an optimal seed scheduling strategy algorithm (OSSSA) in this paper. After using continuous-time Markov processes to mathematically analyze the model of the mimic defense system in cyberspace, we introduce the key factors and their evaluation methods that affecting the CMD defense performance in the OSSSA, then propose a reliable working mechanism of the OSSSA. Furthermore, we present an evaluation method that can effectively evaluate the defense performance of the scheduling algorithms. Experimental results from software simulations and real experiments both show that the OSSSA has better real-time defense performance than the current mainstream scheduling strategy algorithms, and can adapt to different practical application scenarios, which is helpful to the further development of the CMD.

An advanced buyback contract and information asymmetry

This paper proposes a novel advanced buyback (ABB) contract to coordinate a supply chain that consists of one supplier and one retailer. The contract stipulates when a buyback contract is executed and the amount of buyback. We model the interaction of supply chain participants as a Stackelberg game and incorporate the participants’ reservation profits into the game to examine the effectiveness of the ABB contract with complete information. We demonstrate that the ABB contract can conveniently coordinate the supply chain, flexibly allocate profit, and facilitate avoidance of the aggressive overordering behavior of the retailer. This model is extended to the situation of information asymmetry, where the retailer holds private information about the cost of sales in discrete or continuous states. The optimal strategies of the supply chain and the participants are derived. Information asymmetry can damage the supplier but be beneficial to the retailer. The condition under which the supply chain achieves coordination is clarified. A numerical simulation is performed to verify and extend the results of the theoretical analysis. We show that the ABB contract always outperforms the ordinary wholesale price and buyback contracts with complete information. Supply chain coordination is more likely to be achieved if the demand variability is lower when weighing whether to share private information. Our findings can explain why retailers always have an incentive to inflate their cost of sales.

A Framework for Measuring Information Asymmetry

Information asymmetry occurs when an imbalance of knowledge exists between two parties, such as a buyer and a seller, a regulator and an operator, and an employer and an employee. It is a key concept in several domains, in particular, in economics. We propose in this work a general logic-based framework for measuring the information asymmetry between two parties. A situation of information asymmetry is represented by a knowledge base and a set of questions. We define the notion of information asymmetry measure through rationality postulates. We further introduce a syntactic concept, called minimal question subset (MQS), to take into consideration the fact that answering some questions allows avoiding others. This concept is used for defining rationality postulates and measures. Finally, we propose a method for computing the MQSes of a given situation of information asymmetry.

More Information = Less Aggression? Impact of Information Asymmetry on Chinese Patients' Aggression.

Background: Information asymmetry is a widely studied economic phenomenon. It refers to the situation in which one group in a transaction has more information than the other. Nowadays, information asymmetry has been studied not only as a financial topic but also as a potential reason for essential social problems.Objective: To take Chinese doctor–patient relationship as an example and investigate the relationship among information asymmetry, trust level, and aggression behavior using an experimental design.Methods: A total of 44 undergraduates (information asymmetry group, N = 22, 5 males, 17 females, mean age = 18.95, SD = 0.18; information symmetry group, N = 22, 7 males, 15 females, mean age = 19.27, SD = 0.18) took part in our experiment. Different slides and guidance were used to create a virtual information asymmetry situation, and we use the Wake Forest Physician Trust Scale (WFPTS) and the hot sauce allocation paradigm to measure their trust level and aggression, respectively.Results: Participants in the information asymmetry group allocated significantly more hot sauce to the doctor (p <.005, d = 1.09) and displayed significantly lower trust level (p < 0.05, d = −0.78) than the control group. Patients' trust level had a significant mediating effect (95% confidence interval [−1.39, –0.05]).Conclusion: Asymmetric information may arouse patients' aggression and lower their trust in doctors. Patients' trust level is also a significant partial mediator between their aggression and information asymmetry. The current study reinforces the urgent need for information openness in the Chinese medical system.

Subjective Evaluations of Risk Taking Decisions: Experimental Evidence on Outcome Biases and Their Consequences

This study experimentally investigates how a principal uses outcome information in her subjective evaluation of an agent who chooses between alternatives of differing risks, and how outcome bias in the evaluation is related to the agent’s risk taking decision. We consider both a situation of information symmetry, where the principal can observe the agent’s decision, and a situation of information asymmetry, where the agent’s decision is hidden. Within both situations, we compare a condition where the principal receives peer comparison information with a condition where such information is unavailable. We hypothesize and find that principals’ evaluations are subject to an outcome bias, and that the bias is stronger when peer comparison is present. We further hypothesize and find that with peer comparison being present, agents’ decisions become increasingly misaligned with principals’ preferences. Our findings contribute to understanding outcome biases in subjective evaluations of risk taking decisions, and how these biases may contribute to explaining excessive risk taking by agents.

정보비대칭 상황에서 공동주택 하자 문제

Do pre-sale housing contracts serve to create more construction defects than spot-sale contracts? In this paper, it is assumed that the pre-sale system is placed in the information asymmetry situation between the buyer and the builder, so that the moral hazard of the builder is likely to cause more construction defects. It is noted that defects are caused by a lack of incentive for the strict quality control of the builder. Because the buyer is bound to the pre-sale contract in the situation in which the builder does not provide the buyer with enough information about the construction quality in advance. Therefore, as a preventative measure, we propose introducing a system of disclosure of construction information for the equalization of information and a defects disclosure system that utilizes the market reputation of the developer for indirect benefit equalization.

Curbing electronic shopper perceived opportunism and encouraging trust

Purpose Consumers can face a situation of information asymmetry in electronic shopping (ES). The purpose of this paper to examine the relationships between: relational variables such as satisfaction, trust and perceived opportunism; and website cues (cognitive signals such as security and personalization, and experiential signals, such as design and entertainment). Design/methodology/approach The paper opted for the structural equation methodology to analyze data collected from 447 Spanish e-shoppers. Findings Results show different factors that relate to satisfaction, trust and perceived opportunism in ES. Satisfactory experience with ES and entertainment emerge as the most relevant factors to achieve trust and prevent perceived opportunism in e-commerce. Originality/value The five contributions of this study are: the introduction of variables from several theoretical approaches to the study of an agency problem in e-commerce; the study of different ways to gain buyer trust and reduce perceived opportunism in an electronic shopper-vendor relationship; the application of signaling theory as part of the process of helping the principal (e-shopper) to solve their shopping problem in a context of information asymmetry; the analysis of the impact of external cues from e-vendor/site, which allows for a comparison between internal experiences and external quality signals; and the study of entertainment as an important hedonic variable in order to have satisfied and confident e-shoppers.

A critique of the information asymmetry argument in the management and entrepreneurship underpricing literature

Since the last decade management researchers have actively studied the phenomenon of underpricing in initial public offerings. The information asymmetry argument derived from signaling theory is the most commonly used theoretical framework. This essay reviews how the argument is formulated in 14 prior studies published in leading management and entrepreneurship journals. Two major problems are identified: a signal is erroneously argued to have an effect on information asymmetry and the uninformed investors involved in an information asymmetry situation are either ambiguously specified or misspecified. We suggest broadening the scope of underpricing research to include alternative theoretical perspectives and to consider underpricing as an independent variable.

The effects of food safety issues released by we media on consumers’ awareness and purchasing behavior: A case study in China

In recent years, we media, i.e., micro-blogs, have drawn increasing attention to their roles by exposing food safety scandals in China. In this paper, a typical case of a scandal concerning “set-style yogurt and jelly event” reported by a micro-blog was studied and analyzed in terms of its dissemination mode and the mechanism of how a micro-blog from “opinion leaders” affected public attention. Related sales data of set-style yogurt and jelly products were obtained after the event from a supermarket corporation in Beijing and used to analyze trends affected by the scandal. The results indicate that in the new media age, we media has greatly increased dissemination of the voices of “opinion leaders” and triggered large-scale communication of food safety messages to the public. In this serious information asymmetry situation between public and food manufacturer, food-safety scandals revealed by we media could easily be noticed by consumers and further affect their judgments of expected utility and their purchasing behavior. Sales volume decreases and negative influence on brand reputation might contribute to correcting food manufacturers’ behavior. We media could be an effective tool to improve the food-safety status of the market.

Modeling information asymmetry mitigation through food traceability systems using partial least squares

Originally food traceability is not something new, however its added values and potentials which are enabled by information technology is what’s new. Food traceability was imposed on the food industry as a regulatory requirement which came as a response toward food incidents crisis’s like the BSE, salmonella breakouts …etc. These events have made consumers more skeptic about the food they consume especially that a lot of information about food is only known by food producers ,i.e. Genetically modified ingredients, allergic components’ in food…etc, this gap in information has created an information asymmetry situation in the food industry between producers and consumers’, which is well reported in the literature. This study sheds the light on the role of food traceability in reducing uncertainties related to risks of food products, by helping consumers become more informed about the food they consume, through the potentials of tracing food products from farm to fork in a web-based format from the records of traceability systems provided by food producers. Through a survey research we found that food traceability can reduce the aforementioned information asymmetry because it reduces consumer’ perceived risks toward food, this good cause of reducing information asymmetry was found to be faced with a willingness to pay price premiums for traceable products

El papel de la reputación, el boca-oreja, la confianza y la incertidumbre en la contratación de un banco

What factors influence consumers to choose a bank with which to contract a service in a situation of information asymmetry? In this situation the firm has more information than consumers, and this fact generates consumer uncertainty due to a possible firm opportunistic behaviour. To reduce it, consumers can use, on one hand, signals that the bank sends to the market, such as reputation, and on the other hand, they can seek for more informal information, such as positive word-of-mouth communication from relatives and friends, to generate or increase trust, and through this variable, to develop an intention o contract with a specific bank and not others. Relations among those variables were tested with a sample of 155 bank users when they have not still worked with a specific bank. Results indicate the importance both of the reputation signal and of the positive information received of acquaintances and relatives to trust, but with differences according to the level of perceived ex_ante uncertainty moderate those relations.

Information Sharing in Credit Markets: Incentives for Incorrect Information Reporting

The introduction of institutions of credit information sharing - private credit bureaus and public credit registries - in the market for bank loans represent one of the possible solutions of information asymmetry problem, - the problem which the creditors tend to face. However the possibility of information sharing influences the bank's incentives in two different ways. While it disciplines the borrowers and, therefore, reduces the share of bad loans, a bank loses the competitive advantage, namely the monopolistic knowledge about the data in its clients' credit histories. Does the bank have an opportunity at its disposal to use the benefits of information sharing without losing its competitive advantage and its clientele? One way to do so is to report false data on borrowers. This paper analyses the bank's incentives for such opportunistic behavior and describes the impact of false information reporting on the characteristics of market equilibrium. The opportunity to get extra profit and to offer less expensive credit to new clients explains why banks prefer the strategy of dishonest behavior. This paper outlines the role of the informational intermediary in quality control for the data, contained in credit reports. Also, it describes the conditions under which verification of a certain share of reports provides that the parameters characterizing the equilibrium are equal to those in no information asymmetry situation.

The influence of information asymmetry and budget emphasis on the relationship between participation and slack

Propensity to create slack may be influenced by the subordinates ‘reactions to budgetary participation. Prior research indicates that subordinates react favourably to high budgetary participation when it serves some useful purposes for them. Participation may be useful to them in a low information asymmetry situation, when they do not have more information than their superiors, because it enables them to gain from an exchange of information with their superiors. It may also be useful to them in a high budget emphasis situation, when meeting budgeted targets is important, because it enables them to influence the levels of budget targets. Prospect theory suggests that subordinates who find participation useful may have a low propensity to create slack for fear of jeopardising their participation privileges. Hence, subordinates’ propensity to create slack is likely to be low when high participation is allowed in a low information asymmetry situation. When information asymmetry is high, propensity to create slack is also likely to be low when high participation is allowed in a high budget emphasis situation. The results, based on a sample of 103 manufacturing managers, provide support for these expectations.

Quality management and building government information services

In recent years, we media, i.e., micro-blogs, have drawn increasing attention to their roles by exposing food safety scandals in China. In this paper, a typical case of a scandal concerning “set-style yogurt and jelly event” reported by a micro-blog was studied and analyzed in terms of its dissemination mode and the mechanism of how a micro-blog from “opinion leaders” affected public attention. Related sales data of set-style yogurt and jelly products were obtained after the event from a supermarket corporation in Beijing and used to analyze trends affected by the scandal. The results indicate that in the new media age, we media has greatly increased dissemination of the voices of “opinion leaders” and triggered large-scale communication of food safety messages to the public. In this serious information asymmetry situation between public and food manufacturer, food-safety scandals revealed by we media could easily be noticed by consumers and further affect their judgments of expected utility and their purchasing behavior. Sales volume decreases and negative influence on brand reputation might contribute to correcting food manufacturers’ behavior. We media could be an effective tool to improve the food-safety status of the market.

“Buy-back” in international trade: A rationale

When a technology proprietor cannot exploit his advantage by means of ownership of a production facility abroad, a sales contract with “buy-back provisions” may, in fact, be a trade-enhancing resolution to a situation of information-asymmetry between buyer and seller. The important implication is that not all forms of countertrade can be summarily dismissed as inefficient. Just as foreign direct investment can be seen to be a response to environmental or market imperfections, “buy-back” may be a way to deal with institutional or regulatory obstacles such as the prohibition of foreign ownership.