Type Of Information Asymmetry Research Articles

E-Ticarette Bilişsel Önyargılar ve Tüketici Kararlarına Etkileri

Dijitalleşmeyle birlikte ticaret çevrimiçi platformlara taşınmış ve satın alma kararları yüz yüze etkileşim olmadan çevrimiçi olarak alınmaya başlanmıştır. Etkileşimin dijitalleşmesi, satıcılar ve tüketiciler arasındaki ürün özelinde ortaya çıkan bilgi asimetrisini tüketiciler lehine ortadan kaldırmaktadır. Öte yandan bireylerin dijital ortamlarda bıraktığı dijital ayak izleri ile internetin zamandan ve mekândan bağımsız olarak kişiselleştirilmiş içerikler sunabilmesi, yeni bir tür bilgi asimetrisinin ortaya çıkmasına neden olmuştur. Tüketici verilerinin işlenmesi, dijital dürtme mesajları ile bilişsel önyargılar içeren içeriklerin geliştirilmesini mümkün kılmış ve böylece tüketicilerin rasyonel olmayan tüketim kararlarına yönlendirilmesi riski ortaya çıkmıştır. Bu çalışmada öncelikle e-ticaret platformlarının ürün sayfaları incelenmiş ve tüketicileri akıl dışı tüketime yönlendirmek için sıklıkla kullanılan bilişsel önyargılar ortaya çıkartılmıştır. Akabinde, bilişsel önyargıların etkisi altında tüketicilerin karar verme sıklıkları, geliştirilen bir e-ticaret sayfasında gönüllü katılımcılarla yapılan deneyler ile belirlenmiştir. Ayrıca katılımcıların verileri ve katılımcıların rasyonel davranış skorları anket çalışması ile elde edilmiş ve rasyonellik puanı, yaş, cinsiyet, alışveriş sıklığı ve internette geçirilen günlük süre gibi kişisel veriler ile bilişsel önyargılar arasındaki ilişkiler ikili lojistik regresyon ile analiz edilmiştir. Çalışmanın sonucunda her bir bilişsel yanlılığı etkileyen faktörler tespit edilmiş ve ileride yapılacak araştırmalar için tavsiyelerde bulunulmuştur.

The psychological and economic roles of culture on global underpricing difference: A new hierarchical evidence

This paper investigates the ongoing phenomenon of Initial Public Offerings (IPOs) underpricing in cross-country setting by focusing on how national cultures can exert direct and indirect influences on global underpricing difference. In the IPOs market, participants navigate between two types of information asymmetry that attributes to the existence of underpricing difference across countries. Commonly explored are internal category of information asymmetry related to firm-level characteristics and the external category associated with the characteristics of national cultures is less understood. We capture the hierarchical structure of the data across different cultural environments by employing a full Hierarchical Linear Modelling (HLM). We employ 10,212 IPO-issuing firms over 22 years covering 12 advanced, and 10 emerging countries. We find that variations in cultural dimensions measuring the psychological and economic roles of culture directly explain up to 0.999 and 0.980, respectively, while firm-level factors only explain up to 0.097 of the variability in IPO underpricing. Our results produce exclusive evidence showing that culture indirectly influences underpricing variance in three ways: first, by modifying the correlation between the incentive of IPO issuers and underpricing by up to 0.154; second, by modifying the relationship between underwriter reputation and underpricing by up to 0.010; and third, by modifying the association between ex-ante uncertainty surrounding the offering and underpricing by up to 0.273. The findings contribute to the emergent and underdeveloped literature on the association between national cultures and underpricing of IPO firms in the global market.

What you get is not what you paid for: New evidence from a lab experiment on negative externalities and information asymmetries

In markets where ethical goods are available, consumers and producers can voluntarily address the negative externality market failure. However, in reality, these goods are often credence goods and the claims are not verifiable by consumers. We design an experiment to explore whether there can be voluntary internalization of negative externalities in markets controlling for different types of information asymmetry, namely credence claims with the potential for false advertisements, the possibility of certifying claims and finally mandatory truthful claims. We observe that there is a limited scope for ethical goods to be traded and negative externalities reduced in all informational setups. However, when false claims can be made, markets will appear very prosocial to the outside observer who will see widespread concerns for externalities and a price premium on allegedly ethical goods relative to conventional ones. In fact, conventional goods are just being falsely advertised as ethical. In addition, the price premium is seldom enough to cover the additional cost of producing a good that minimizes externalities. Even when credence claims are not allowed, the market will only partially internalize negative externalities, leaving thus room for some form of regulatory intervention.

Blockchain, Information Production, and Ownership Structure: The Case of a Decentralized Academic Journal

This study investigates the economic implications of blockchain-based academic journals, proposed by the recent computer science literature, in which authors and referees are individually incentivized. We construct a model in which the journal publishes qualified papers under two types of information asymmetry: paper quality and type of referee. We obtain the conditions under which equilibrium in decentralization exists or fails and leads to a better outcome than in centralization. Our research also helps us understand how to design an incentive structure for information providers required for funding decisions, loan inspections, and credit ratings.

The nature of the Artificially Intelligent Firm - An economic investigation into changes that AI brings to the firm

With the arrival of Artificial Intelligence (AI), the nature of the firm is changing and economic theory can provide guidance to businesses as well as to politics when formulating adequate strategies for this unknown terrain. By interpreting AI as a new type of agent within the firm, the theory of the firm can serve as a lingua franca to connect computer sciences and social sciences when dealing with the interdisciplinary phenomenon of AI. To achieve this, this paper adopts the perspective of the economic theory of the firm to systematically explore the changes that AI brings to the institution of the firm. In total, five interrelated propositions are discussed that are rooted in the traditional theory but trace the nature of the Artificially Intelligent Firm: AI intensifies the effects of economic rationality on the firm (1). AI introduces a new type of information asymmetry (2). AI can perforate the boundaries of the firm (3). AI can create triangular agency relationships (4) and AI has the potential to remove traditional limits of integration (5).

Budgetary influence under information asymmetries: Evidence from Nigeria’s subnational agricultural investments

Abstract With emerging recognition of changing climates’ impact on agricultural productivity, a sharper lens is focused on how to target agricultural public investments for development. This paper contributes to an understanding of budget decision-making processes in agricultural development, by examining to what extent those with superior information and expertise on a sector have sway over how public resources to the sector are allocated. The empirical qualitative analysis of this paper employs process tracing with an embedded case study design, based on interviews of 79 senior public sector key-informants in Nigeria. We also analyzed quantitative public expenditure data in the study areas. We draw insights from theories of information asymmetries in the public sector along three dimensions. Within the first type of information asymmetry, we find that, despite the higher agricultural technical expertise that sector bureaucrats have vis-a-vis the elected non-sector-specific chief executives, it is the latter who heavily influence agricultural resource allocation. In the second form of information asymmetry, the benefits from superior lower-tier information are only exploited at one subnational (state) level but not at the other (local government) level. Within the third kind of information asymmetry, public leaders prioritize funding for those types of public investments that are more visible by their nature, and outputs of which materialize relatively rapidly; this disfavors agriculture. Going beyond the literature on the impact of information interventions, this study sheds light on the extent to which information already in the public sector is tapped into to guide the provision of public goods and services.

Шляхи вирішення агентської проблеми в корпоративному управлінні: роль бухгалтерського обліку

The expedience of conducting scientific researches in the direction of solving the agency problem in corporate management is grounded. The historical aspects of the formation of theoretical foundations of the phenomenon of information asymmetry are considered. The types of information asymmetry and their characteristics are analyzed. The influence of the effects of information asymmetry (unfavorable selection, moral hazard, retention) on the activity of corporate structures is considered. The ways of minimizing the negative impact of the agency problem on the activity of corporate structures are analyzed. Two groups of researchers’ approaches to solving the agency problem are identified in the context of the existence of a normative-positive dichotomy regarding the methodology of research. The necessity of taking into account the peculiarities of the internal and external environment of the corporate structure in the process of choosing methods to minimize the negative consequences of the agency problem is substantiated. The ways to improve accounting in the direction of minimizing the negative consequences of the agency problem are identified.

Disentangling Adverse Selection and Moral Hazard: Evidence from China’s Automobile Insurance Market

Adverse selection and moral hazard are different types of information asymmetry in the insurance market, but their empirical evidence cannot be separated using the traditional positive risk-coverage correlation test. In this paper, we use a new method to disentangle adverse selection and moral hazard, which is to test for the correlation between the past and current claim numbers under experience rating. We conduct the test on the auto insurance data from a Chinese large domestic insurer from 2010-2013. We expect that the serial correlation of claim numbers would be negative under moral hazard but positive under adverse selection because the experience-based rating could incentivize drivers to take more precautions after a claim occurs, which can reduce the number of claims in the next period. However, drivers with high risk should have a consistently high number of claims over time because their risk type does not change dramatically in a short period. Our empirical result shows a negative correlation between the past and current claim numbers, indicating that moral hazard is more critical than adverse selection in this auto insurance market. Besides, the negative coefficient has a larger magnitude for drivers whose no-claim discount rate is higher since these drivers would face a more significant increase in premiums once a claim occurs. We further examine the design of insurance product in this market to investigate why moral hazard is significant. We find that the option of waiving coinsurance liability is underpriced so that over 90 percent of drivers in the sample choose to buy full insurance. Hence, we propose that the regulators should have less stringent regulation on product design and rate.

Supply chain coordination with inventory and pricing decisions

In this study, we conduct a comprehensive literature review on the inventory and pricing decisions under the supply chain coordination. To be specific, we review the publications from 1997 to 2017 and divide the papers into six areas for discussion, they are: decisions under integrated supply chain, supply contract, capital-constrained, competition, risk aversion, and information asymmetry. After reviewing the literature, we identify three major future research directions. First, we propose to explore different real world industrial supply contracts and the forms of demand function. Second, limited studies consider risk aversion behaviour of the supply chain members; hence, we also propose to examine the inventory and pricing decisions under supply chain coordination with risk-averse retailer and risk-averse supplier, respectively. Finally, it is also interesting to investigate different types of information asymmetry.

Information asymmetry around S&P 500 index changes

Purpose – This study aims to explore information asymmetry (IA) (as measured by the adverse selection component of the bid-ask spread) around S&P 500 revisions. Design/methodology/approach – The authors use adverse selection cost of trading measures to examine the effects of S&P 500 index composition changes on the trading environment from 2001 to 2010. Findings – The authors find that the adverse selection cost of trading significantly decreases post-addition and increases post-deletion. However, the intraday price dynamics of additions to the index seem to be distinct from those of deletions from the index. The event period cumulative abnormal returns (CARs) for additions are significantly associated with the change in the adverse selection cost of trading. However, this association is non-significant for deletions. The CARs for deletion events are found to be significantly associated with the change in realized spreads. Realized spreads are a measure of revenue earned by liquidity providers in the market. Originality/value – This study helps better understand the dynamics of two types of IA – one from a firm to investor and the other between investors – and presents evidence of the role of adverse selection in index changes. By doing so, it helps better understand the mechanism driving price formation post-addition to and deletion from an index.

The Big Question: Have social media and/or smartphones disrupted life in your part of the world?

The Big Question: Have social media and/or smartphones disrupted life in your part of the world?

Opportunism and Honest Incompetence—Seeking Explanations for Noncompliance in Public Procurement

AbstractThis article utilizes agency theory to explain maverick buying in governmental agencies, that is, noncompliance to centrally negotiated frame agreements. Traditional agency theory assumes the agent to be an opportunistic self-interest seeker. A complementary view of agency problems portrays man as an honest, yet not fully competent, actor; both agents and principals may be burdened by “honest incompetence.” We apply both perspectives on principal-agent relationships to study maverick buying in government procurement and link agency problems to three governance mechanisms: monitoring, training, and guidance. We find that guidance and training help to reduce governmental employees’ noncompliance, but output monitoring does not. Our findings further indicate that maverick buying is related to goal incongruence and two different types of information asymmetry: Agency problems may arise not only because the agent has information the principal is not aware of but also because the principal may have information the agent is not aware of. Future research in public management using agency theory to study instances of hidden action could benefit from applying a similar dual lens to behaviors previously examined as purely opportunistic.

Changing conditions in the Hong Kong new issues market

This paper examines the Hong Kong IPO market from August 1995 to July 1999 and finds that the time of the June 30 1997 political handover coincides with the transition in the IPO market from ‘hot’ to ‘cold’. Although the handover was an anticipated event, an explanation for the change in market is that the political handover created uncertainty among investors; a type of information asymmetry where all investors faced greater uncertainty. Our finding provides empirical support to literature which proposes that events in the months preceding the October 27 1997 correction in Asian stock markets facilitated a decline in confidence in financial markets, subsequently characterised as the ‘Asia Financial Crisis’. In addition, we find initial returns of newly listed stocks in the Hong Kong market are associated with market condition but not associated with any particular industry (i.e., PROPERTY) or geographic location (i.e., ‘H’ SHARES) suggesting that the prevailing market condition was spread more generally across issues.

Risktaking, Limited Liability, and the Competition of Bank Regulators

Limited liability and asymmetric information between an investment bank and its lenders provide an incentive for a bank to undercapitalise and finance overly risky business projects. To counter this market failure, national governments have imposed solvency constraints on banks. However, these constraints may not survive in systems competition, as systems competition is likely to suffer from the same type of information asymmetry which induced the private market failure and which brought in the government in the first place (Selection Principle). As national solvency regulation creates a positive international policy externality on foreign lenders of domestic banks, there will be an undersupply of such regulation. This may explain why Asian banks were undercapitalised and took excessive risks before the banking crisis emerged.

Risk Taking, Limited Liability and the Competition of Bank Regulators

Limited liability and asymmetric information between an investment bank and its lenders provide an incentive for a bank to undercapitalise and finance overly risky business projects. To counter this market failure, national governments have imposed solvency constraints on banks. However, these constraints may not survive in systems competition, as systems competition is likely to suffer from the same type of information asymmetry which induced the private market failure and which brought in the government in the first place (Selection Principle). As national solvency regulation creates a positive international policy externality on foreign lenders of domestic banks, there will be an undersupply of such regulation. This may explain why Asian banks were undercapitalised and took excessive risks before the banking crisis emerged.