scholarly journals Information mirages and financial contagion in an asset market experiment

2015 ◽  
Vol 42 (6) ◽  
pp. 1029-1055 ◽  
Author(s):  
Charles Noussair ◽  
Yilong Xu
Keyword(s):  
Asymmetric Information ◽  
Private Information ◽  
Relevant Information ◽  
The Other ◽  
Asset Markets ◽  
Financial Contagion ◽  
Systematic Effect ◽  
Inside Information ◽  
True Nature ◽  
Content Type

Purpose – The purpose of this paper is to consider whether asymmetric information about correlations between assets can induce financial contagion. Contagion, unjustified by fundamentals, would arise if participants react in one market to uninformative trades in the other market that actually convey no relevant information. The authors also consider whether the market accurately disseminates insider information about fundamental value correlations when such information is indeed present. Design/methodology/approach – The authors employ experimental asset markets to answer the research questions. The experimental markets allow participants to simultaneously trade two assets for multiple rounds. In each round, a shock occurs, which either have an idiosyncratic effect on the shocked asset, or a systematic effect on both assets. Half of the time, there exist insiders who know the true nature of the shock and how it affects the value of the other asset. The other half of the time, no agent knows whether there is a correlation between the assets. In such cases, there is the potential for the appearance of information mirages. Uninformed traders, in either condition, do not know whether or not there exist insiders, but can try to infer this from the market activity they observe. Findings – The results of the experiment show that when inside information about the nature of the correlation between assets does exist, it is readily disseminated in the form of market prices. However, when there is no private information (PI), mirages are common, demonstrating that financial contagion can arise in the absence of any fundamental relationship between assets. An analysis of individual behavior suggests that some unprofitable decisions appear to be related to an aversion to complex distributions of lottery payoffs. Originality/value – The study focusses on one of the triggers of unjustified financial contagion, namely, asymmetric information. The authors have studied financial contagion in a controlled experimental setting where the authors can carefully control information, and specify the fundamental interdependence between assets traded in different markets.

Information asymmetry and incentive contracting with the tax department

2017 ◽  
Vol 16 (3) ◽  
pp. 385-402 ◽  
Author(s):  
Horn-chern Lin ◽  
Tao Zeng
Keyword(s):  
Theoretical Model ◽  
Information Asymmetry ◽  
Private Information ◽  
Relevant Information ◽  
Tax Planning ◽  
Risk Averse ◽  
Content Type ◽  
Incentive Schemes ◽  
The Impact ◽  
Optimal Incentives

Purpose This paper aims to examine the design of optimal incentives for a firm’s tax department in the presence of information asymmetry. Design/methodology/approach This paper provides a theoretical model to examine the design of optimal incentives. The focus is on a situation in which a risk-averse tax department has private information about its efficiency type or effort to be exerted before the firm sets the incentive schemes. Findings This paper shows that a tax department’s risk aversion leads to a decline in the fraction of the cost borne by the tax department. It also shows that the optimal contract schemes should be designed to filter out as much uncontrollable risk as possible by using third-party information relevant to a tax department’s realized cost. Social implications It contributes to a better understanding of the impact of corporate incentive plans on firms’ tax practices. This study, by designing a theoretical model, helps explain why there exist differences in tax planning across firms based on the finding that incentives for tax planning activities differ across firms. Originality/value This paper is the first study that considers the situation in which tax managers’ risk-averse and types, as well as relevant information collected by the firms, can be used to set up incentive schemes and investigates whether and how the incentive schemes will be affected when firms improve their prior information by acquiring relevant information before the tax department acts.

scholarly journals Outsourcing under incomplete information

2017 ◽  
Vol 10 (1) ◽  
pp. 3-15 ◽  
Author(s):  
Tarun Kabiraj ◽  
Uday Bhanu Sinha
Keyword(s):  
Asymmetric Information ◽  
Incomplete Information ◽  
Private Information ◽  
Low Cost ◽  
Complete Information ◽  
Fixed Cost ◽  
Perfect Bayesian Equilibrium ◽  
Content Type ◽  
Bayesian Equilibrium ◽  
Plant Level

Purpose The purpose of this paper is to show that outsourcing can occur as outcome of a separating or pooling perfect Bayesian equilibrium although it is not profitable under complete information. Therefore, asymmetric information can itself be a reason for outsourcing. Design/methodology/approach The present paper constructs a model of two firms interacting in the product market under asymmetric information where one firm has private information about its technological capability, and it has the option to produce inputs in-house or buy inputs from an input market. However, using outsourced inputs involves a fixed cost at the plant level. The model solves for perfect Bayesian equilibrium. Findings There are situations when under complete information, outsourcing of the input will not occur, but, under incomplete information, either only the low-cost type or both high and low-cost types will go for outsourcing, and there always exist reasonable beliefs supporting these equilibria. In particular, when the fixed cost is neither too small not too large, a separating equilibrium occurs in which the low-cost type outsources inputs from the input market but the high-cost type produces in-house; hence, outsourcing signals the firm’s type. Outsourcing by only the high-cost type firm will never occur in equilibrium. Originality/value That incomplete or asymmetric information can itself be a reason for strategic outsourcing is never identified in the literature. The present paper is an attempt to fill this gap and raise the issue of outsourcing in an incomplete information environment.

And Remember the Truth That Once Was Spoken

2019 ◽  
Vol 66 (1) ◽  
pp. 12-22
Author(s):  
Franziska Schreckenbach ◽  
Klaus Rothermund ◽  
Nicolas Koranyi
Keyword(s):  
Target Word ◽  
Private Information ◽  
Relevant Information ◽  
The Other ◽  
Self Disclosure ◽  
Categorization Task ◽  
Task Irrelevant ◽  
Target Words

Abstract. Whenever individuals reveal personally relevant information to a stranger, they have to remember their self-disclosure for future interactions. Relying on instance-based theories of automaticity, we hypothesized that knowledge about having revealed private information to someone unfamiliar is retrieved automatically whenever this person is encountered again. In two studies, participants were orally interviewed by two different persons and instructed to be honest to one of them and to lie to the other. This instruction was either related to the identity of the interviewers (Experiment 1) or their gender (Experiment 2). Afterward, the target words honest and dishonest had to be identified in a categorization task in which pictures of the interviewers and of unknown persons served as task-irrelevant prime stimuli. In line with the hypothesis, results revealed congruence effects, indicating faster identification of the target word honest following the picture of a person whom one had told the truth.

Posterior approach for cervical intramedullary arteriovenous malformation with diffuse-type nidus

1999 ◽  
Vol 91 (1) ◽  
pp. 105-111 ◽  
Author(s):  
Kenji Ohata ◽  
Toshihiro Takami ◽  
Alaa El-Naggar ◽  
Michiharu Morino ◽  
Akimasa Nishio ◽  
...  
Keyword(s):  
Spinal Cord ◽  
Poor Prognosis ◽  
Posterior Approach ◽  
The Other ◽  
Anterior Spinal Artery ◽  
Neural Element ◽  
Feeding Artery ◽  
Diffuse Type ◽  
Content Type ◽  
Fine Print

✓ The treatment of spinal intramedullary arteriovenous malformations (AVMs) with a diffuse-type nidus that contains a neural element poses different challenges compared with a glomus-type nidus. The surgical elimination of such lesions involves the risk of spinal cord ischemia that results from coagulation of the feeding artery that, at the same time, supplies cord parenchyma. However, based on evaluation of the risks involved in performing embolization, together with the frequent occurrence of reperfusion, which necessitates frequent reembolization, the authors consider surgery to be a one-stage solution to a disease that otherwise has a very poor prognosis. Magnetic resonance (MR) imaging revealed diffuse-type intramedullary AVMs in the cervical spinal cords of three patients who subsequently underwent surgery via the posterior approach. The AVM was supplied by the anterior spinal artery in one case and by both the anterior and posterior spinal arteries in the other two cases. In all three cases, a posterior median myelotomy was performed up to the vicinity of the anterior median fissure that divided the spinal cord together with the nidus, and the feeding artery was coagulated and severed at its origin from the anterior spinal artery. In the two cases in which the posterior spinal artery fed the AVM, the feeding artery was coagulated on the dorsal surface of the spinal cord. Neurological outcome improved in one patient and deteriorated slightly to mildly in the other two patients. Postoperative angiography demonstrated complete disappearance of the AVM in all cases. Because of the extremely poor prognosis of patients with spinal intramedullary AVMs, this surgical technique for the treatment of diffuse-type AVMs provides acceptable operative outcome. Surgical intervention should be considered when managing a patient with a diffuse-type intramedullary AVM in the cervical spinal cord.

scholarly journals Overconfidence and Timing of Entry

Games ◽  
2020 ◽  
Vol 11 (4) ◽  
pp. 44
Author(s):  
Luis Santos-Pinto ◽  
Tiago Pires
Keyword(s):  
Private Information ◽  
Welfare Effect ◽  
The Other ◽  
Ex Ante ◽  
Rational Player ◽  
Timing Of Entry ◽  
Game Players ◽  
The Impact ◽  
Stackelberg Leader

We analyze the impact of overconfidence on the timing of entry in markets, profits, and welfare using an extension of the quantity commitment game. Players have private information about costs, one player is overconfident, and the other one rational. We find that for slight levels of overconfidence and intermediate cost asymmetries, there is a unique cost-dependent equilibrium where the overconfident player has a higher ex-ante probability of being the Stackelberg leader. Overconfidence lowers the profit of the rational player but can increase that of the overconfident player. Consumer rents increase with overconfidence while producer rents decrease which leads to an ambiguous welfare effect.

Islamic hedging for pilgrimage funds: case of Indonesia

2019 ◽  
Vol 11 (3) ◽  
pp. 328-341
Author(s):  
Rifki Ismal ◽  
Nurul Izzati Septiana
Keyword(s):  
Exchange Rate ◽  
The Other ◽  
Exchange Rate Risk ◽  
Content Type ◽  
Other Hand ◽  
Rate Risk ◽  
Risk Identify ◽  
Hajj Season ◽  
The Right ◽  
Very High

Purpose The demand for Saudi Arabian real (SAR) is very high in the pilgrimage (hajj) season while the authority, unfortunately, does not hedge the hajj funds. As such, the hajj funds are potentially exposed to exchange rate risk, which can impact the value of hajj funds and generate extra cost to the pilgrims. The purpose of this paper is to conduct simulations of Islamic hedging for pilgrimage funds to: mitigate and minimize exchange rate risk, identify and recommend the ideal time, amount and tenors of Islamic hedging for hajj funds, estimate cost saving by pursuing Islamic hedging and propose technical and general recommendations for the authority. Design/methodology/approach Forward transaction mechanism is adopted to compute Islamic forward between SAR and Rupiah (Indonesian currency) or IDR. Findings – based on simulations, the paper finds that: the longer the Islamic hedging tenors, the better is the result of Islamic hedging, the decreasing of IDR/USD is the right time to hedge the hajj funds and, on the other hand, the IDR/SAR appreciation is not the right time to hedge the hajj funds. Findings Based on simulations, the paper finds that: the longer the Islamic hedging tenors, the better is the result of Islamic hedging, the decreasing of IDR/USD is the right time to hedge the hajj funds and, on the other hand, the IDR/SAR appreciation is not the right time to hedge the hajj funds. Research limitations/implications The research suggests the authority to (and not to) hedge the hajj fund, depending on economic conditions and market indicators. Even though the assessment is for the Indonesian case, other countries maintaining hajj funds might also learn from this paper. Originality/value To the best of author’s knowledge, this is the first paper in Indonesia that attempts to simulate the optimal hedging of hajj funds.

Relief of facial pain after combined removal of precentral and postcentral cortex

1971 ◽  
Vol 34 (4) ◽  
pp. 537-543 ◽  
Author(s):  
Richard A. Lende ◽  
Wolff M. Kirsch ◽  
Ralph Druckman
Keyword(s):  
Facial Pain ◽  
The Other ◽  
Precentral Gyrus ◽  
Nerve Section ◽  
Content Type ◽  
Burning Pain ◽  
Cortical Localization ◽  
The Brain ◽  
Fine Print ◽  
Frontal Lobotomy

✓ Cortical removals which included precentral and postcentral facial representations resulted in relief of facial pain in two patients. Because of known failures following only postcentral (SmI) ablations, these operations were designed to eliminate also the cutaneous afferent projection to the precentral gyrus (MsI) and the second somatic sensory area (SmII). In one case burning pain developed after a stroke involving the brain stem and was not improved by total fifth nerve section; prompt relief followed corticectomy and lasted until death from heart disease 20 months later. In the other case persistent steady pain that developed after fifth rhizotomy for trigeminal neuralgia proved refractory to frontal lobotomy; relief after corticectomy was immediate and has lasted 14 months. Cortical localization was established by stimulation under local anesthesia. Each removal extended up to the border of the arm representation and down to the upper border of the insula. Such a resection necessarily included SmII, and in one case responses presumably from SmII were obtained before removal. The suggestions of Biemond (1956) and Poggio and Mountcastle (1960) that SmII might be concerned with pain sensibility may be pertinent in these cases.

scholarly journals Teaching innovations in Asian higher education: perspectives of educators

2018 ◽  
Vol 13 (2) ◽  
pp. 179-190 ◽  
Author(s):  
T.M. Wong
Keyword(s):  
Higher Education ◽  
Design Methodology ◽  
Higher Education Institutions ◽  
The Other ◽  
Asian Countries ◽  
Structured Interviews ◽  
Content Type ◽  
Advanced Technologies ◽  
The Many

Purpose The purpose of this paper is to identify the teaching innovations that have been implemented in higher education institutions in Asia and the perspectives of educators on them. Design/methodology/approach Semi-structured interviews were conducted with 28 educators who were affiliated with 23 higher education institutions in ten Asian countries/regions. The interviews covered information about the teaching innovations of the participants’ institutions, the characteristics of the innovative practices and the participants’ views on them. The relationships between the characteristics of institutions and their teaching innovations were also examined. Findings The results showed that the teaching innovations included two main categories, namely, those which involved the use of advanced technologies and those which did not. The innovations that involved the use of advanced technologies were mainly from larger institutions, while the other category was mainly from smaller ones and had been practised for less than 1.5 years. Differences were also identified between the two categories in terms of the aims and importance of innovations, innovative features, the evaluation of innovations and improvements needed for them. Originality/value The results highlighted that technology is only one of the many aspects of teaching innovations, which is different from the view prevailing in the literature. They also suggested that differences in the scale of institutions (in terms of number of students) possibly influences the kind of teaching innovations adopted.

Formation of contracts for the international sale of goods under Korean law and the CISG

2017 ◽  
Vol 21 (3) ◽  
pp. 208-223
Author(s):  
Byung Mun Lee
Keyword(s):  
Comparative Study ◽  
Design Methodology ◽  
Case Law ◽  
The Other ◽  
Basic Question ◽  
Content Type ◽  
International Sale Of Goods ◽  
The Comparative Study ◽  
International Sales ◽  
Insight Into

Purpose The purpose of this paper is to describe and analyze the rules on the formation of contracts under Korean law and the Contracts for the International Sale of Goods (CISG) in a comparative way and introduce the relevant proposed rules under the Amendment Draft of the Korean Civil Code (KCC). In addition, it attempts to compare and evaluate them in light of the discipline of comparative law. Design/methodology/approach In order to achieve the purposes of the study, it executes a comparative study of the rules as to the formation of contracts of the CISG, Korean law and the Amendment Draft of the KCC. The basic question for this comparative study is placed on whether a solution from one jurisdiction is more logical than the others and to what extent each jurisdiction has responded to protect the reasonable expectations of the parties in the rules as to the formation of contracts. Findings The comparative study finds that most of the rules under the CISG are quite plausible and logical and they are more or less well reflected in the proposals advanced by the KCC amendment committee. On the other hand, the other rules under the CISG which have brought criticisms in terms of their complexity and inconsistent case law invite us their revision or consistent interpretation. The drawbacks of the CISG have also been well responded in the Amendment Draft of the KCC. Nevertheless, it is quite unfortunate that the Amendment Draft of the KCC still has a rule that regards any purported performance with non-material alteration of the terms of an offer as an acceptance. Originality/value This study may provide legal and practical advice to both the seller and the buyer when they enter into a contract for international sales of goods. In addition, it may render us an insight into newly developed or developing rules in this area and show us how they interact with each other. Furthermore, it may be particularly useful in Korea where there is an ongoing discussion for revision of the KCC.

Measuring the service gaps in the roles of quantity surveyors in the emerging market

2016 ◽  
Vol 23 (5) ◽  
pp. 1111-1131 ◽  
Author(s):  
AbdulLateef Olanrewaju
Keyword(s):  
Emerging Markets ◽  
Construction Industry ◽  
Design Methodology ◽  
Emerging Market ◽  
Supply And Demand ◽  
The Other ◽  
Primary Data ◽  
Content Type ◽  
Practical Implications ◽  
Survey Questionnaires

Purpose – The opportunities that the emerging markets present to the players in the construction industry means that the players need to expand on the scope and size of their responsibilities and duties to the stakeholders. Each of the professionals now demands more specialised and sophisticated services from one another. The other players in the construction industry now require more emerging responsibilities and duties from the quantity surveyors. The purpose of this paper is to examine the roles that “modern” quantity surveyors play by measuring the gaps that exist in the services that the quantity surveyors provide. Design/methodology/approach – Primary data are collected through survey questionnaires. In total, 23 roles played by modern quantity surveyors are identified and addressed to the respondents to rank the rate at which quantity surveyors provide these “emerging” services. The collected data were analysed statistically. Findings – The results of the findings led to the conclusion that the quantity surveyors were not meeting the expectations of other players. Therefore, for competitiveness, quantity surveyors need to better meet demand expectations. Research limitations/implications – This findings of this research are constrained to the services or functions that the quantity provide in the construction industry. Practical implications – This knowledge is valuable to academic institutions that offer quantity surveying programmes, to practicing quantity surveyors, governments, and other players in the construction industry. It will allow quantity surveyors to reconcile supply and demand expectations. Originality/value – There is no known conclusive empirical study on services offered by quantity surveyors in any emerging markets. Therefore, the findings offer a fresh understanding on the services of quantity surveyors not only in Nigeria but elsewhere. While some of the services are common, others are peculiar to emerging markets.

Sign in / Sign up

Export Citation Format

Share Document