Search results for "INFORMATION ASYMMETRY"
showing 10 items of 45 documents
Optimal vs satisfactory transparency : The impact of global macroeconomic fluctuations on corporate competitiveness
2019
Abstract Being able to separate temporary global macroeconomic influences – caused by fluctuations in exchange rates, interest rates and inflation – from intrinsic performance – related to a superior product, production process or management – is crucial to assessing the development of a firm’s competiveness. Against that background, this paper analyzes institutions’ role in making firms supply outside shareholders with relevant information corresponding to satisfactory transparency from the shareholder perspective. Based on a sample of the 100 largest public European firms, it is found that no firm provided information to a level deemed satisfactory by the outside shareholder. One explanat…
Reward crowdfunding contribution as planned behaviour: An extended framework
2019
Published by Elsevier Inc. This is an open access article under the CC BY license. Reward crowdfunding is a popular channel for entrepreneurial fundraising, whereby backers receive non-monetary benefits in return for monetary contributions while accepting risks of non-delivery on campaign pitch promises. To understand contribution behavior in this context, we apply the Theory of Planned Behavior (TPB) for analyzing contribution intentionality and behavior, as well as their antecedents. We use survey data from 560 users of Finland's leading reward crowdfunding platform– Mesenaatti. Our findings show that an extended TPB model holds for reward crowdfunding and that both financial-contribution…
Overreporting Oil Reserves
2009
An increasing number of oil market experts argue that OPEC members substantially overstate their oil reserves. While the economic implications could be dire, the incentives for overreporting remain unclear. This paper analyzes these incentives, showing that oil exporting countries may overreport to raise expected future supply, discourage oil-substituting R&D, and hence improve their future market conditions. Overreporting, however, comes at a cost since it must be backed by observable actions and therefore induces costly distortions of supply. Surprisingly, these latter can eliminate other distortions that arise regardless of information asymmetries in presence of endogenous technological …
Asymmetric Demand Information and Foreign Direct Investment
2007
We examine the FDI versus exports decision of firms competing in an oligopolistic (quantitysetting) market under demand uncertainty and asymmetric information. Compared to a firm that chooses to export, a firm that chooses to set up a plant in the host market has superior information about local market demand. In addition to the well-known tension between the fixed set-up costs of investment, the additional variable costs of exports and oligopoly sizes, the incentive to invest abroad is explained by the strategic learning effect. FDI may be observed even if trade costs are zero. The analysis is robust to price competition and to the possibility that a foreign firm can engage in both FDI and…
The Context(s) of Precaution: Ideological and Instrumental Appeals to the Precautionary Principle
2009
This article contributes to the clarification of the concept of precaution and its function in social debate. The authors compare the uses of precaution in science and technology—related conflicts (as indicated by an analysis of media reports on precaution) with data from a survey on precaution and the role of science in decision making. While the survey data confirm the existence of opposing “idealized” or “ideological” conceptualizations of the role of science in regulatory decisions, the analyzed media reports show an added degree of complexity on the level of social dynamics. The media analysis identifies an instrumental use of the concept of precaution in social debate, which is indep…
Explaining a Surge in IPR Filings: Uncertain Design Rights and Learning Their Boundaries in the Finnish Sauna Heater Market
2017
We present a case study of a surge in design right filings in an industry transforming from technology-based to design-based competition. The motives for and outcomes of filing, and how these changed over time are discussed. We go on to explore the events, which offered the agents opportunities to update their beliefs about the scope of design right protection. We find that filing motives change from specific protection goals to freedom to operate over time. We also find that the actors faced several, but sometimes contradictory, learning opportunities. Finally, we argue that uncertain design rights may have fostered entrepreneurial optimism. Policy makers could level the playing field and …
Entry with two correlated signals : the case of industrial espionage and its positive competitive effects
2021
Recent advances in information and communication technologies have increased the incentives for firms to acquire information about rivals. These advances may have major implications for market entry because they make it easier for potential entrants to gather valuable information about, for example, an incumbent’s cost structure. However, little theoretical research has actually analyzed this question. This paper advances the literature by extending a one-sided asymmetric information version of Milgrom and Roberts’ (1982) limit pricing model. Here, the entrant is allowed access to an intelligence system (IS) of a certain precision that generates a noisy signal on the incumbent’s cost struct…
What drives the disintegration of the loan origination value chain in the banking business
2015
Purpose - The purpose of this paper is to analyze the vertical disintegration of the bank loan origination value chain. This paper conducts a study on the credit information market from the perspective of the bank's decision to vertically disintegrate the loan origination value chain. The main aim is to identify the relevant drivers of the decision to vertically disintegrate the credit assessment phase in the lending business.Design/methodology/approach - Transaction cost economics and information asymmetry are the typical perspectives of analysis of the vertical scope of business value chains.Findings - This paper argues that in order to capture the drivers underlying the dynamic evolution…
Supply chain coordination under asymmetric information and partial vertical integration
2022
AbstractSupply chain contracting is known to suffer from inefficiency in the presence of asymmetric information. Full vertical integration would eliminate the informational inefficiency but can be strategically undesirable. Yet today’s supply chain partnerships exhibit a certain degree of partial vertical integration via equity ties between the firms. Such governance forms received limited attention in supply chain research. Management literature suggests that partial vertical integration may help the firms to ease contracting problems by aligning their incentives, and thus improve the total surplus. We address this proposition by studying a model of a partially integrated supply chain in w…
Ethical Considerations in Crowdfunding
2020
AbstractThe current chapter addresses ethical issues in crowdfunding practice from a multiple stakeholder perspective. It draws on ethical principles outlined in both classical and business-specific approaches. The discussion first presents classical approaches to ethical decision making. It then discusses whether crowdfunding presents an ethical solution or a source of ethical problems. Later, it suggests a framework presenting a classification of potential ethical dilemmas and pitfalls in crowdfunding practice, as well as potential means for addressing them. The discussion concludes with concrete implications for crowdfunding ethics research and practice.