Source Of Private Information Research Articles

Informational Synergies in Consumer Credit

Lenders can consider multiple sources of private information to assess consumer credit risk but little is known about the informational synergies between these sources. Using more than 1.7 million observations from checking accounts and credit card accounts of the same individuals during 2007-2014, we find that activity from both accounts contains information beyond credit scores and other controls. Checking accounts display warning indications earlier and more accurately than credit card accounts. Type I default prediction errors decrease by 33% when lenders consider information from both sources. The evidence suggests sizeable informational synergies that lenders can exploit to manage credit relationships.

Do Hedge Funds Possess Private Information in IPO Stocks? Evidence from Post-IPO Holdings

Using hedge funds' holdings of IPO stocks, we find that stocks with hedge fund holdings beyond what can be explained by publicly available information yield abnormal returns, suggesting that hedge funds possess private information in IPO stocks. Moreover, compared to other investors, hedge funds have more predictive ability for future stock returns in post-IPO trading and are able to sell IPO stocks before underperforming periods start. Finally, hedge funds earn higher abnormal returns in “connected” stocks when their prime brokers serve as the IPO underwriters, indicating that such connection is an important source of private information for hedge funds.

Social media communication strategies of government agencies: Twitter use in Korea and the USA

This study examines Twitter use by the central government in Korea and the federal government in the USA by employing the webometric technique to extract their Twitter activity (basic Twitter statistics such as the numbers of followers, followings, and Tweets) and the social network analysis technique to map the relationship between their Twitter accounts and the direction of outlinks in their Tweets. The results of the initial analysis indicate some differences in Twitter strategies between the two governments. For example, Korean ministries were well connected through a dense network, engaged in collective cooperation, and retweeted common content to reinforce their collective agendas regardless of their main administrative functions, whereas US government departments were less collective and more individualistic and retweeted those messages that specifically fit the purpose of each department. In addition, the results for outlinks indicate that US government departments preferred private sources of information, whereas Korean ministries, government sources.

The contribution of private and public information in foraging by Australasian gannets

Predators that forage on foods with temporally and spatially patchy distributions may rely on private or public sources of information to enhance their chances of foraging success. Using GPS tracking, field observations, and videography, we examined potential sites and mechanisms of information acquisition in departures for foraging trips by colonially breeding Australasian gannets (Morus serrator). Analyses of the bill-fencing ceremony between mated pairs of breeding gannets did not detect correlations between parameters of this reciprocal behavior and foraging trips, as would have been predicted if gannets used this behavior as a source of private information. Instead, 60% of the departing birds flew directly to join water rafts of other conspecific en route to the feeding grounds. The departure of solitary birds from the water rafts was synchronized (within 60 s) with the arrival of incoming foragers and also among departing birds. Furthermore, solitary departing birds from the rafts left in the same directional quadrant (90º slices) as the prior arriving (67%) and also prior departing forager (79%). When associated plunge dives of conspecific were visible from the colony, providing a public source of information, gannets more often departed from the water rafts in groups. Our study thus provides evidence for the use of water rafts, but not the nest site, as locations of information transfer, and also confirms the use of local enhancement as a strategy for foraging flights by Australasian gannets.

When is Prevention More Profitable than Cure? The Impact of Time-Varying Consumer Heterogeneity

We argue that in pharmaceutical markets, variation in the arrival time of consumer heterogeneity creates differences between a producer's ability to extract consumer surplus with preventives and treatments, potentially distorting R&D decisions. If consumers vary only in disease risk, revenue from treatments---sold after the disease is contracted, when disease risk is no longer a source of private information---always exceeds revenue from preventives. The revenue ratio can be arbitrarily high for sufficiently skewed distributions of disease risk. Under some circumstances, heterogeneity in harm from a disease, learned after a disease is contracted, can lead revenue from a treatment to exceed revenue from a preventative. Calibrations suggest that skewness in the U.S. distribution of HIV risk would lead firms to earn only half the revenue from a vaccine as from a drug. Empirical tests are consistent with the predictions of the model that vaccines are less likely to be developed for diseases with substantial disease-risk heterogeneity.

ANALYSIS OF COCOA-BASED AGRICULTURAL KNOWLEDGE AND INFORMATION SYSTEMS IN THE EASTERN REGION OF GHANA

This study analyzed cocoa-based Agricultural Knowledge and Information Systems (AKIS) in Atiwa and East Akim districts of the Eastern Region of Ghana by using descriptive statistics and Total Information Score (TIS). Total Information Score (TIS) was used to rank the information sources according to the farmers' extent of contact with and usefulness of the information sources. On the whole, the total information score of mass media ranked the most frequently used and useful information sources, with personal information sources the second and public information sources third followed by private information sources ranking the least thus fourth. The study recommends for the use of mass media especially radio and television sets in availing cocoa-based information to farmers.

Visual Representation of Senior Citizens - The Role of Discourse Coalitions for Identification with Images and Accessible Information Delivery

This paper discusses why senior citizens are more and more represented as eternally youthful seniors in many western societies today and why images of the frail needy seniors play a less dominant role. First, the historical roots of these kind of images will be presented. Then, the concept of discourse coalitions (Hajer, 1997) will be used to analyse specific Dutch examples illustrating the ways senior citizens are represented as eternally youthful seniors in public and private information sources. Finally, I will discuss the importance of future empirical research on the identification with images for senior citizens’ accessible information delivery, so can we can ensure that they will not be excluded from crucial information.

The Public and Private Information Sources of Volatility

We study the impact of public and private information on prices and volatility in financial markets. Previous studies demonstrate that public information, such as macroeconomic news releases, significantly affects both prices and volatility, while information that is distributed asymmetrically across participants, and thus privately held, affects prices. However, research on the impact of private information on volatility is scarce. We investigate this link using a high-frequency data set of the 30 year U.S. Treasury bond futures. Furthermore, we contribute to the analysis of information effects on returns and propose a model that simultaneously estimates the effects of public and private information on both prices and volatility. We find that private information variables such as order flow and bid-ask spread are statistically and economically significant explanatory variables for volatility. Our results imply that private information should not be ignored in volatility modeling for, e.g., risk management

On the sources of private information in FX markets

We investigate the source of information advantage in inter-dealer FX trading using data on trades and counter-party identities. In liquid dollar exchange rates, information is concentrated among dealers that trade most frequently and specialize their activity in a particular rate. In cross-rates, traders that engage in triangular arbitrage are best informed. Better-informed traders are also located on larger trading floors. In cross-rates, the ability to forecast flows explains all of the advantage of the triangular arbitrageurs. In liquid dollar rates, specialist traders can forecast both order-flow and the component of exchange rate changes that is uncorrelated with flow.

Reproductive state affects reliance on public information in sticklebacks

The degree to which animals use public and private sources of information has important implications for research in both evolutionary ecology and cultural evolution. While researchers are increasingly interested in the factors that lead individuals to vary in the manner in which they use different sources of information, to date little is known about how an animal's reproductive state might affect its reliance on social learning. Here, we provide experimental evidence that in foraging ninespine sticklebacks (Pungitius pungitius), gravid females increase their reliance on public information generated by feeding demonstrators in choosing the richer of two prey patches than non-reproductive fish, while, in contrast, reproductive males stop using public information. Subsequent experiments revealed reproductive males to be more efficient asocial foragers, less risk-averse and generally less social than both reproductive females and non-reproductives. These findings are suggestive of adaptive switches in reliance on social and asocial sources of information with reproductive condition, and we discuss the differing costs of reproduction and the proximate mechanisms that may underlie these differences in information use. Our findings have important implications for our understanding of adaptive foraging strategies in animals and for understanding the way information diffuses through populations.

Source of Information-Driven Trading on the Prague Stock Exchange

We focus on the extent of information-driven trading sourced from the behavior of market makers on an emerging market. We develop a methodology based on the Easley et al. (1996) model in order to estimate the extent of informed trading originating from the behavior of Czech market makers on the Prague Stock Exchange (PSE). Based on the high percentage of block trades in the years 2003-05, the market makers focusing on large customers may have a significant source of private information on the PSE. Significant differences in the behavior of market makers lead us to conclude that these differences remarkably affect the extent of information-driven trading. Under current regulation, market makers are able to protect their private information and not reveal it for a surprisingly long period of time. Our study contributes to the detection mechanisms of regulatory authorities on the emerging markets in identifying the suspicious behavior of particular market participants.

The spotlight effect and the illusion of transparency in social anxiety

[Clark, D. M., & Wells, A. (1995). A cognitive model of social phobia. In: R. G. Heimberg, M. R. Liebowitz, D. A. Hope, & F. R. Schneier (Eds.), Social phobia: diagnosis, assessment, and treatment (pp. 69–93). New York: Guildford Press] cognitive model of social phobia suggests that both public and private sources of information contribute to the construction of the self as a social object, which is thought to maintain the disorder. This study used two concepts developed in social psychology that might help to explain the processes that contribute to the development of this constructed self. These two concepts are the spotlight effect [Gilovich, T., Medvec, V. H., & Savitsky, K. (2000). The spotlight effect in social judgment: an egocentric bias in estimates of the salience of one's own actions and appearance. Journal of Personality and Social Psychology, 78(2), 211–222] and the illusion of transparency [Gilovich, T., Medvec, V. H., & Savitsky, K. (1998). The Illusion of transparency: biased assessments of others’ ability to read one's own emotional states. Journal of personality and social psychology, 75(2), 332–346]. Participants performed a memory task under either a low or a high social-evaluative condition. In the high social-evaluative condition, participants reported higher levels of the spotlight effect and more negative evaluation of task performance, compared to participants in the low social-evaluative condition. There were no differences between the two conditions in levels of the illusion of transparency. Surprisingly, however, in the low social-evaluative condition, participants reported higher levels of the illusion of transparency than the spotlight effect, whereas, in the high social-evaluative condition, they reported the opposite. Results suggest that the spotlight effect may be specific to social-evaluative concerns, whereas, the illusion of transparency may represent more general features of social anxiety concerns. Implications of the results for Clark and Wells’ cognitive model of social phobia model are discussed.

Libertarian Health Policy

Libertarian Health Policy

Order Flow and the Formation of Dealer Bids: An Analysis of Information and Strategic Behavior in the Government of Canada Securities Auctions

Using data on Government of Canada securities auctions, this paper shows that in countries where direct access to primary issuance is restricted to government securities dealers, Order-flow information is a key source of private information for these security dealers. Order-flow information is revealed to a security dealer through his interactions with customers, who can place bids in the auctions only through the security dealer. Since each dealer interacts with a different set of customers, they, in effect, see different portions of the market demand and supply curves, leading to differing private inferences of where the equilibrium price might.

Corporate social responsibility and environmental research and development

The paper models corporate investments in environmental research and development (R&D) as investments in corporate social responsibility. The theory is tested using primary data collected by surveys of U.S. industry along with data from the U.S. Environmental Protection Agency, the U.S. Census, and other public and private sources of information about corporations and their industries. The theory and the empirical study support the hypothesis that socially responsible corporate investments in environmental R&D increase with corporate self-interest in reducing pollution caused by toxic emissions. Consequently, corporate environmental R&D investments depend on both public policy and the structure of markets.

Communication in Private-Information Models: Theory and Computation

Communication and no-communication versions of a two-stage principal-agent model are compared. The models contain a risk-averse agent and two sources of private information, a shock to preferences followed by a productive action. Both models are formulated as linear programs, which are then used to compute solutions to examples. For the communication model, an alternative method of accounting for the utility from off-equilibrium strategies is derived. This method greatly reduces the size of the linear program. For the no-communication model a Revelation-Principle like proof is provided. In simple cases, a sufficient condition for communication to be valuable is derived. In these cases, communication improves risk-sharing in bad states of the world. In more complicated cases, computed examples demonstrate how communication may also alter labor supply. Further examples demonstrate how action and consumption lotteries may separate agents by their shock.

Private or Public Information in Foreign Exchange Markets? An Empirical Analysis

In macroeconomic models exchange rates are determined by public information. Trading activities are completely irrelevant. In general, these models have low explanatory power for short horizons, which might be due to the possible existence of private information. Dealers in the foreign exchange market consider the order flow from customers to be the most important source of private information. I test a microstructural trading model incorporating private information, including both order flow and macroeconomic variables. The results show that order flow is an important variable for explaining weekly changes in exchange rates, thereby indicating an important role for private information.

Information Asymmetry, R&D, and Insider Gains

Although researchers have documented gains from insider trading, the sources of private information leading to information asymmetry and insider gains have not been comprehensively investigated. We focus on research and development (R&D)—an increasingly important yet poorly disclosed productive input—as a potential source of insider gains. Our findings, for the period from 1985 to 1997 indicate that insider gains in R&D‐intensive firms are substantially larger than insider gains in firms without R&D. Insiders also take advantage of information on planned changes in R&D budgets. R&D is thus a major contributor to information asymmetry and insider gains, raising issues concerning management compensation, incentives, and disclosure policies.

The Relationship among Accounting Choices Prior to Mandatory Accounting Rules, Information Disclosure, and Timing of Adoption of Mandatory Rules

AbstractInformation disclosure theory suggests that voluntary accounting choices may be substitutes for information produced under mandatory accounting rules, and that late adopters of mandatory accounting rules manage information disclosure via choice of accounting methods before the mandatory rule. Statement of Financial Accounting Standards No. 8 (SFAS No. 8) required uniform accounting methods and uniform disclosure of foreign operations for multinational firms. Prior to SFAS No. 8, multinational firms had complete flexibility in accounting for foreign operations. The empirical analysis correlates voluntary accounting method choices before SFAS No. 8 with mandated disclosures after SFAS No. 8 for 98 early adopters and 112 late adopters. The results are consistent with the implications of information disclosure theory.RésuméLa théorie sur la divulgation de renseignements suggère que des choix facultatifs de comptabilité peuvent rem‐placer les renseignements présentés sous des règies de comptabilité obligatoires et que ceux/celles qui ont adopté récemment des rèles de comptabilité obligatoires gèrent la divulgation de renseignements via le choix de méthodes de comptabilité avant la règie obligatoire. Le Rapport sur les Normes de Comptabilité Financière nd̀ 8 (R.N.C.F. n° 8 / SFAS No. 8) a exige I'uniformité des méthodes de comptabilité et l'uniformité dans la divulgation des opérations étrangères destinées aux firmes multinationals. Avant le R.N.C.F. nd̀ 8, les multinationals jouissaient d'une flexibilité complète en comptabilité destinée aux opérations étrangères. L'analyse empirique met en corrélation les choix facultatifs de méthodes de comptabilité avant le R.N.C.F. n° 8 avec les divulgations autorisées après le R.N.C.F. n° 8 pour 98 personnes l'ayant adopté au début et 112 personnes l'ayant adopté récemment. Les résultats sont compatibles avec les implications de la théorie sur la divulgation des renseignements.

Public Signals and the Equilibrium Allocation of Private Information

The purpose of this paper is to examine how accounting disclosures can affect the equilibrium allocation of private information. In addition to various kinds of publicly available information, such as accounting disclosures, an investor can also acquire private information for a cost. In such an environment, changes in accounting disclosure requirements may change investors' incentives to acquire private information, so part of the impact of a new accounting disclosure requirement may well be changes in the acquisition of private information. In an economy with informative prices, however, the allocation of private information must be determined as part of an overall equilibrium. As traders choose between signals from different information sources they rationally anticipate the information that will be freely available by observing the asset's price. But the informativensss of price depends on the allocation of private information. Thus an equilibrium model of the information environment must be used to assess the effect of different disclosure requirements. I consider an economy with two different sources of private information. Each trader may remain privately uninformed, or purchase a signal from only one information source, or purchase a signal from both infor-