Information Asymmetry Research Articles

Procurement contract design for distributed photovoltaic project considering output risk under asymmetric production effort information

PurposeDistributed photovoltaic (DPV) projects generally have output risks, and the production effort of the supplier is often private information, so the buyer needs to design the optimal procurement contract to maximise its procurement utility.Design/methodology/approachBased on the principal-agent theory, we design optimal procurement contracts for DPV projects with fixed payments and incentive factors under three situations, i.e. symmetry information, asymmetry information without monitoring and asymmetry information with monitoring. We obtain the optimal production effort and expected utility of the supplier, the expected output and expected utility of the buyer and analyse the value of the information and monitoring.FindingsThe results show that under asymmetric information without monitoring, risk-averse suppliers need to take some risk due to output risk, which reduces the optimal production effort of the supplier and the expected output and expected utility of the buyer. Therefore, when the monitoring cost is below a certain threshold value, the buyer can introduce a procurement contract with monitoring to address the asymmetry information. In addition, under asymmetric information without monitoring, the buyer should choose a supplier with a low-risk aversion.Originality/valueConsidering the output risk of DPV projects, we study the optimal procurement contract design for the buyer under asymmetric information. The results provide some theoretical basis and management insights for the buyer to design optimal procurement contracts in different situations.

Mobile phones and Mozambique farmers: Less asymmetric information and more trader competition?

We measure how the introduction of mobile phones in Mozambique affected unit values of household maize sales, maize producer prices and traders’ margins. Our estimations are based on both representative household surveys for the years 2002, 2003, 2005, 2006 and 2008, and weekly producer and market prices of white maize grain from July 1997 to December 2009 for 15 major producer markets. We find household sales unit values and producer price decreases, and traders’ margin increases between 14% and 22%, indicating benefits for traders. Next, we investigate heterogeneity of impacts in order to explore underlying mechanisms: impacts on margins decrease with population density and network density, and increase with gains from long-distance trade. Impacts on household selling prices are not significantly correlated with educational attainment, but the fall in prices is less with larger household wealth. Impacts on household selling prices and producer prices also become less negative over time, suggesting delayed adoption by farmers. Our results are robust to various threats.

Determinants of Citations in Tourism and Hospitality Studies

Citation metrics are frequently used to assess research and rank journals and researchers. Nevertheless, this is still a process with asymmetric information. Tourism research has matured within a small community and through a multidisciplinary scientific paradigm. This paper aims to understand the determinants of tourism research citation patterns. To this end, 101,968 papers within fifteen years (2004-2018) are analysed. Our empirical results suggest that authors’ prestige, the multidisciplinary nature of research, and the impact factor of journals and bibliometric articles will likely increase an article’s citations. This paper represents a step forward in understanding the citation formation process in tourism research.

The Application of Game Theory in Engineering Project Management

The coexistence of conflict of interest and cooperation are two of the most significant characteristics in the process of construction project management. To maximize their interests, all parties involve and restrict each other in the process of management, resulting in the phenomenon of information asymmetry between Party A and Party B, passive slacking of contractors, project quality defects, and project claims in the process of project management. By applying game theory to the construction of engineering projects, it can facilitate managers from all parties to choose better decisions, thereby further improving the level of engineering management and expanding their own profits. Starting from the basic concepts of game theory and engineering project management, this article focuses on three perspectives: project bidding stage, construction stage, and engineering claim stage. It analyzes the game between owners and contractors under incomplete information conditions and concludes that both parties should realize the sharing of information resources and strictly abide by the principle of engineering contract equality. Several suggestions related to engineering project management are also proposed.

Connecting the dots: A systematic review of corporate social responsibility, information asymmetry, and economic implications

AbstractThis paper conducts a comprehensive review of the theoretical and empirical connections between Corporate Social Responsibility (CSR), Information Asymmetry (IA), and their economic consequences. It employs a bibliometric analysis on 73 Web of Science manuscripts using VOSviewer1.6.18 software, combining this analysis with a literature review. The results reveal four thematic areas categorized into three clusters: CSR and IA, the impact of CSR and IA on internal risk control and corporate performance, and the broader effects of CSR and IA. The systematic literature review finds a prevailing consensus that CSR can alleviate IA issues, leading to positive economic outcomes like increased stock liquidity, enhanced investment efficiency, and reduced cost of capital. This study's uniqueness lies in its integration of bibliometric analysis and systematic literature review to provide a holistic summary of both theoretical frameworks and the economic implications of the CSR‐IA relationship. It offers valuable insights and recommendations for future research in this field.

Assessing the Anti-Corruption Capability of Public E-Procurement Adoption: A Case Study in the Federal Government of Somalia

This study examines the potential of public e-procurement to serve as a means to counteract corruption in Somalia. Coupled with Generalized Linear Regression (GLM), survey research design is employed to investigate the dynamics between different e-procurement components and factors associated with corruption, such as monopoly power, asymmetric information, transparency, and accountability. The research focuses on ministries and government departments in Mogadishu, encompassing all 25 federal ministries in the sample. The findings reveal that public e-procurement is linked to a reduction in monopoly power, indicating a decline in the influence of single suppliers in the market. Additionally, e-procurement diminishes asymmetric information in the procurement process, promoting fairness and equal access to information for all stakeholders. The study further confirmed a positive relationship between e-procurement adoption and heightened transparency and accountability within public procurement processes. The implications of these findings are significant for policymakers, underscoring the value of investing in e-procurement infrastructure to foster integrity, operational efficiency, and public trust in the realm of public procurement.

Target Firm Advertising and Firm Value

Consistent with hypotheses underlying firm advertising, we find that targets with pretakeover advertising obtain higher premiums, whereas their acquirers earn lower announcement returns. These economically significant effects suggest that through advertising, targets increase their profile and negotiating power. Further, targets that advertise are more likely to initiate their takeovers, attract multiple bidders, receive enhanced bids, capture more merger rents, and even in failed acquisitions, experience a 1% permanent revaluation. The latter result differentiates between information asymmetry and behavioral explanations for the target advertising. Overall, the results support the hypothesis that management advertises to transmit information to investors and potential acquirers. This paper was accepted by Victoria Ivashina, finance. Funding: A. L. Tran acknowledges financial support from the Mergers and Acquisitions Research Centre at Bayes Business School. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01534 .

How does digital transformation affect corporate resilience: a moderation perspective study

ABSTRACT In the context of the accelerated development of the digital economy and the implementation of the innovation-driven development strategy, does digital transformation inevitably improve corporate resilience? Based on measuring the moderation of corporate digital transformation, this paper examines the dynamic relationship between digital transformation and corporate resilience using the theory of new structural economics and double machine learning methods. The results show that the more moderate the digital transformation, the higher the level of corporate resilience. Agency costs, financing constraints, and irrational decision-making bias constitute important influencing mechanisms. Further analysis reveals that the resilience-enhancing effect of moderate digital transformation is more pronounced among corporations with high levels of corporate governance, low levels of information asymmetry, more diverse executive backgrounds and in manufacturing corporates. The relevant findings of this paper provide guidance and decision-making references for promoting the high-quality development of corporates.

Privacy Barriers in Health Monitoring: Scoping Review

Background Health monitoring technologies help patients and older adults live better and stay longer in their own homes. However, there are many factors influencing their adoption of these technologies. Privacy is one of them. Objective The aim of this study was to provide an overview of the privacy barriers in health monitoring from current research, analyze the factors that influence patients to adopt assisted living technologies, provide a social psychological explanation, and propose suggestions for mitigating these barriers in future research. Methods A scoping review was conducted, and web-based literature databases were searched for published studies to explore the available research on privacy barriers in a health monitoring environment. Results In total, 65 articles met the inclusion criteria and were selected and analyzed. Contradictory findings and results were found in some of the included articles. We analyzed the contradictory findings and provided possible explanations for current barriers, such as demographic differences, information asymmetry, researchers’ conceptual confusion, inducible experiment design and its psychological impacts on participants, researchers’ confirmation bias, and a lack of distinction among different user roles. We found that few exploratory studies have been conducted so far to collect privacy-related legal norms in a health monitoring environment. Four research questions related to privacy barriers were raised, and an attempt was made to provide answers. Conclusions This review highlights the problems of some research, summarizes patients’ privacy concerns and legal concerns from the studies conducted, and lists the factors that should be considered when gathering and analyzing people’s privacy attitudes.

The Impact of Geographic Factors on Credit Risk: A Study of Chinese Commercial Banks

Abstract Controlling credit risk is crucial for maintaining financial stability, and the role of geographic factors in this regard is a significant concern for scholars and policymakers. Drawing on the concept of information asymmetry, we developed a theoretical model to analyze how geographic factors influence credit risk. Our theoretical proposition suggests that the spatial organization of banks affects the efficiency of collecting and processing soft information, ultimately impacting the credit risk. To test this proposition, we collected microdata from Chinese commercial banks spanning the period from 2011 to 2022. Employing a mediating effect model, we empirically examined the relationship between spatial organizational structure and credit risk. Our results indicate that the distance between bank operations and functional distance impedes the collection and processing of soft information, thereby exacerbating credit risk in banks. The study focuses on examining how the spatial organizational structure of Chinese commercial banks affects credit risk. By analyzing geographic factors and information asymmetry, the study aims to understand how the organization of banks influences the collection and processing of soft information, which in turn impacts the credit risk. Furthermore, our analysis of the sample reveals that the mediating role of soft information varies between state-owned banks and joint-stock banks due to their distinct customer profiles. On the basis of these findings, we propose several policy recommendations, including a focus on enhancing the collection and processing of soft information, promoting the growth of locally based small and medium-sized banks, and reducing information barriers within bank hierarchies.

Strategic introduction of the showroom channel in a platform supply chain: how to balance cost inefficiency against information asymmetry

Strategic introduction of the showroom channel in a platform supply chain: how to balance cost inefficiency against information asymmetry

A Nonlinear Programming Approach to Solving Interval-Valued Intuitionistic Hesitant Noncooperative Fuzzy Matrix Games

Initially, fuzzy sets and intuitionistic fuzzy sets were used to address real-world problems with imprecise data. Eventually, the notion of the hesitant fuzzy set was formulated to handle decision makers’ reluctance to accept asymmetric information. However, in certain scenarios, asymmetric information is gathered in terms of a possible range of acceptance and nonacceptance by players rather than specific values. Furthermore, decision makers exhibit some hesitancy regarding this information. In such a situation, all the aforementioned expansions of fuzzy sets are unable to accurately represent the scenario. The purpose of this article is to present asymmetric information situations in which the range of choices takes into account the hesitancy of players in accepting or not accepting information. To illustrate these problems, we develop matrix games that consider the payoffs of interval-valued intuitionistic hesitant fuzzy elements (IIHFEs). Dealing with these types of fuzzy programming problems requires a significant amount of effort. To solve these matrix games, we formulate two interval-valued intuitionistic hesitant fuzzy programming problems. Preserving the hesitant nature of the payoffs to determine the optimal strategies, these two problems are transformed into two nonlinear programming problems. This transformation involves using mathematical operations for IIHFEs. Here, we construct a novel aggregation operator of IIHFEs, viz., min-max operators of IIHFEs. This operator is suitable for applying the developed methodology. The cogency and applicability of the proposed methodology are verified through a numerical example based on the situation of conflict between hackers and defenders to prevent damage to cybersecurity. To validate the superiority of the proposed model along with the computed results, we provide comparisons with the existing models.

The Impact of Accounting Information Quality on Corporate Investor Relations Research

This paper aims to explore the impact of accounting information quality on corporate investor relations and proposes corresponding enhancement strategies. The paper begins with an overview of accounting information quality and analyzes its importance to investors. It then delves into the impact of accounting information quality on investors, such as the effects of information asymmetry and information transparency on investor decision-making and trust. Furthermore, strategies for improving accounting information quality are proposed, providing reference for enterprises to optimize their accounting information quality.

Institutional investor network and idiosyncratic volatility of stocks

AbstractThis paper constructs an institutional investor network based on the heavy holdings of the same stock in China and conducts a social network analysis to investigate the influence of this network on stock price volatility from the perspectives of network structure (density) and location (centrality). The study demonstrates that institutional investor network density is negatively related to stock price volatility, while network centrality is positively related to it. Mechanism analyses further reveal that network density reduces stock price volatility by mitigating private information arbitrage behavior among institutional investors, whereas network centrality increases stock price volatility by creating private information arbitrage opportunities within the network. Additionally, the paper finds that information asymmetry enhances the positive effect of network centrality on stock price volatility. These findings are generally consistent across subsample analyses for different market states, reactions to good and bad news, and types of equity ownership, as well as in other robustness tests. The practical implications of these findings are significant for market stability regulation.

Home, School, and Community: Building a "Trinity" Education Mechanism Based on Collaboration

The establishment of a 'Trinity' collaborative education mechanism among families, schools, and society is a significant policy decision made by the Central Committee of the Communist Party of China and the State Council. It plays a vital role in fulfilling the fundamental task of fostering virtue and talent, promoting students' holistic development, and enhancing overall education quality. With the continuous deepening of the concept of collaborative education among families, schools, and society, substantial progress has been achieved in various tasks. However, issues such as vague roles in character building, asymmetric information, and inadequate coordination mechanisms still persist.This study delves into the current situation and problems regarding collaborative education efforts among families, schools, and society. It identifies strategies to address these challenges with the aim to more effectively drive educational reform and innovation. By doing so, it seeks to create an even better environment for the all-round development of students.

How Digital Platforms Promote Roles of Nonprofit Human Service Organizations During the COVID-19 in China

ABSTRACT The COVID-19 pandemic compelled nonprofit human service organizations (NPHS) to rapidly adapt to heightened service demands while prioritizing the well-being of their staff and volunteers. Although digital platforms hold promise in facilitating NPHS adaptation, little is known about their impact during the crisis. How and through what pathways do digital platforms help NPHS adapt their service roles in times of crisis? Did digital platforms with different types of sponsorship vary in the way they affect NPHS’s roles? Our study, based on 94 interviews in China, reveals that digital platforms assisted NPHS through three pathways: reducing transaction costs in stakeholder engagement, mitigating information asymmetry in targeting service recipients, and promoting shared responsibility for volunteer participation. Different sponsorship types influenced these pathways: government-sponsored platforms enhanced legitimacy, business-sponsored platforms leveraged private resources, and nonprofit-sponsored platforms bolstered citizen trust. This research informs scholars and practitioners on understanding how NPHS remained agile and innovative while facing extraordinary external challenges.

Environmental, social, and governance performance and corporate debt maturity in China

The prevalence of over-holding short-term debt is widespread among Chinese companies. This study aims to explore the intricate association between environmental, social, and governance (ESG) involvement and corporate debt maturity. Utilizing data from samples of publicly listed Chinese firms from 2011 to 2021, we observe a positive correlation between ESG performance and the long-term debt ratio of enterprises. Importantly, the marginal effect of ESG on debt maturity is obvious for enterprises exhibiting higher levels of ESG performance. Rigorous robustness checks, meticulous treatment of endogeneity, and the application of random forest prediction techniques substantiate the aforementioned conclusions. Heterogeneity analysis unveils that state-owned enterprises, enterprises with low investor attention, high-polluting enterprises, and those subject to stringent government environmental governance derive greater benefits from ESG enhancement. Mechanism analysis further elucidates that the causal relationship between ESG performance and debt maturity may be attributed to the ameliorating effects of ESG on information asymmetry, default risk, and innovation activities. Finally, our study discerns that the improved debt maturity resulting from the ESG effect signifies a noteworthy mitigation in firms' maturity mismatch. This investigation contributes novel empirical evidence to comprehending the implications of ESG and alleviating the debt maturity mismatch in enterprises characterized by an over-reliance on short-term debt.

Inventor CEOs and financing of innovation: Evidence from IPOs

We examine the role of inventor CEOs—those with personal hands-on experience of innovation—in the financing of innovation. Using a sample of technology initial public offerings (IPOs) in the US, we document that inventor CEOs are associated with lower underpricing at the time of the IPOs. Inventor CEOs also appear more capable of taking their firms public during “cold” IPO market periods when financing conditions are more difficult. Analyses based on regulatory changes and a founder-only sample suggest that these relationships are causal. Further, inventor-led firms appear to invest the IPO proceeds more productively, as reflected in the firms’ superior innovation outcomes in the post-IPO period. The stock market fails to fully understand these relationships, and IPOs led by inventor CEOs produce large positive abnormal returns in the three years following the offering. Our findings are consistent with inventor CEOs facilitating innovation financing for startup firms by effectively reducing information asymmetry and valuation uncertainty of firm's innovation capital for outside investors.

Crowdfunding Success Factors: Financial Information and Advertising Finance

This study aimed to determine whether financial information, business location, funding objectives and advertising content as intervening variables can help the success of funding through 10 crowdfunding platforms registered with OJK. This study used signalling theory in discussing equity crowdfunding platforms, which can be assumed by small investors as a signal of business quality and can convince investors to invest, thus reducing the problem of information asymmetry. The research method used in this study was descriptive quantitative with the analytical model used to test the hypothesis was the logistic regression analysis model. The population of this study consisted of companies seeking funding through crowdfunding platforms registered with OJK Indonesia. The research was conducted in 2023. The data used in this study was secondary data obtained from published crowdfunding platform data. A purposive sampling technique was used to determine the research sample. The results of this study are expected to provide information to funding project owners and investors to be used as a guide in making decisions. Keywords: financial information, business location, funding purpose, advertising finance, and funding success

EXPRESS: Flowers and Bees: Spatial Network Effects in the Adoption of a Sharing-Economy Platform

This paper empirically analyzes the spatiotemporal diffusion of a car-sharing platform that connects consumers with individual car owners. We develop a model of adoption by both consumers and providers that accommodates network effects across locations, as consumers travel to pick up cars, and information asymmetry, as only the providers’ locations are shown on a map. We apply it to data at the earliest stage of the platform and find that proximity and consumer mobility play a significant role in the spatial network effects of existing providers on consumers across locations. Consequently, the impact of additional supply at a destination on consumer adoptions at an origin varies by origin-destination pair and is asymmetric, as certain destinations draw more visitors than others and given differences in local characteristics. In contrast, existing consumers have a limited impact on provider adoptions. Through seeding experiments, we investigate how the geographic distribution of initial participants impacts the platform diffusion and find that targeting the supply side in big cities leads to the highest platform growth. We also use our parameter estimates to measure the long-term impact of a local promotional campaign and show that it is mostly local despite spatial network effects.