Design of Incentive Mechanism for Independent Directors Based on Monitoring Mechanism under Asymmetric Information Condition

2009 ◽  
Author(s):  
Xu Yan-li
Keyword(s):  
Asymmetric Information ◽  
Incentive Mechanism ◽  
Independent Directors ◽  
Monitoring Mechanism

Heterogeneous Market Responses and the Listing Effect in M&A

2012 ◽  
Vol 02 (02) ◽  
pp. 1250007 ◽  
Author(s):  
Qingzhong Ma ◽  
David A. Whidbee ◽  
Wei Zhang
Keyword(s):  
Asymmetric Information ◽  
Relative Size ◽  
Conventional Approach ◽  
Omitted Variables ◽  
Market Responses ◽  
Monitoring Mechanism ◽  
Method Of Payment ◽  
Pooled Samples

Unlisted acquisitions differ from listed ones in three important aspects: the possibility of forming blockholders, which substitute debt as a monitoring mechanism; the liquidity discount, which mitigates managerial hubris; and the distinct deal process through which two-sided asymmetric information is revealed. Due to these differences, same firm and deal characteristics could induce heterogeneous market responses, depending on the target listing status. We find that such heterogeneous responses exist in usual characteristics such as method of payment, relative size, acquirer size, leverage, and market-to-book ratios. After these heterogeneous responses are incorporated, the puzzling "listing effect" disappears. Our results also indicate that the conventional approach used to investigate pooled samples of listed and unlisted acquisitions is effectively misspecified due to omitted variables.

Does gender diversity on boards reduce information asymmetry problems? Empirical evidence from the French market

2019 ◽  
Vol 10 (2) ◽  
pp. 144-166
Author(s):  
Nadia Loukil ◽  
Ouidad Yousfi ◽  
Raissa Wend-kuuni Yerbanga
Keyword(s):  
Asymmetric Information ◽  
Stock Market ◽  
Gender Diversity ◽  
Market Liquidity ◽  
Idiosyncratic Volatility ◽  
Independent Directors ◽  
Corporate Boards ◽  
Content Type ◽  
Bid Ask Spread ◽  
The Impact

Purpose The purpose of this paper is to investigate the effect of female members in boards of directors on asymmetric information in the French stock market. Design/methodology/approach The authors use two proxies for asymmetric information: the idiosyncratic volatility and the bid-ask spread. This study is conducted on all listed firms in the SBF 120 index between 2002 and 2012. Findings Results show that gender diversity in boardrooms has a negative effect on the level of private information in stock markets and reduces the bid-ask spread. However, these effects are significant in family-controlled firms: female inside directors significantly increase the idiosyncratic volatility and the bid-ask spread, while female independent directors decrease both proxies for stock market liquidity. Research limitations/implications Our empirical findings contribute to the current debate on the benefits of gender diversity on corporate boards from the market perspective. It shows that, under specific conditions, financial markets could be receptive to the presence of female directors in boardrooms. Practical implications Practitioners and policymakers advocate the benefits of gender diversity on corporate boards. This paper shows that when the protection of minority shareholders is poor, the stock market is receptive to the presence of women independent directors, only in family controlled firms. This is a further argument that could help women to overcome glass-ceiling barriers they usually face to achieve top management positions. Originality/value This paper provides support for the increased attention paid to gender-diverse boards. It addresses the market sensitivity toward the presence of women members in French boardrooms and their positions. This is the first paper, to the best of our knowledge, to address how appointing women to different positions in the boardroom could provide signals to investors in the presence of asymmetric information. French firms are mostly family controlled. Thus, the findings bring valuable information of the impact of board diversity on the stock market considering family and nonfamily firms.

scholarly journals Optimal Contract Design for Cooperative Relay Incentive Mechanism under Moral Hazard

2015 ◽  
Vol 2015 ◽  
pp. 1-7 ◽  
Author(s):  
Nan Zhao ◽  
Minghu Wu ◽  
Wei Xiong ◽  
Cong Liu
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Optimization Problems ◽  
Incentive Mechanism ◽  
Contract Design ◽  
Spatial Diversity ◽  
Spectrum Efficiency ◽  
Cooperative Relay ◽  
Relay Nodes ◽  
Relay Incentive

Cooperative relay can effectively improve spectrum efficiency by exploiting the spatial diversity in the wireless networks. However, wireless nodes may acquire different network information with various users’ location and mobility, channels’ conditions, and other factors, which results in asymmetric information between the source and the relay nodes (RNs). In this paper, the relay incentive mechanism between relay nodes and the source is investigated under the asymmetric information. By modelling multiuser cooperative relay as a labour market, a contract model with moral hazard for relay incentive is proposed. To effectively incentivize the potential RNs to participate in cooperative relay, the optimization problems are formulated to maximize the source’s utility while meeting the feasible conditions under both symmetric and asymmetric information scenarios. Numerical simulation results demonstrate the effectiveness of the proposed contract design scheme for cooperative relay.

Parameterized Model Design and Extension for Principal-Agent Incentive Mechanism

2011 ◽  
Vol 55-57 ◽  
pp. 1869-1874
Author(s):  
Jun Chen ◽  
Yan Li Xu ◽  
Dan Liu
Keyword(s):  
Mathematical Analysis ◽  
Incentive Mechanism ◽  
Substitution Effect ◽  
Theoretical Framework ◽  
Principal Agent ◽  
Model Design ◽  
Incentive Mechanisms ◽  
Contract Formation ◽  
Monitoring Mechanism ◽  
Parameterized Model

Parameterized model of principal-agent incentive mechanism has been designed through mathematical analysis in this paper. The analysis of monitoring mechanism is introduced in the principal-agent incentive mechanism, which extends the theoretical framework of incentives. The results show that: monitoring mechanisms and incentive mechanisms are relevant and the interaction between them has a substitution effect. They can encourage or induce an agent to work hard. Therefore, incentive mechanisms and monitoring mechanisms should be taken into account in the process of compensation contract formation. The introduction of monitoring mechanisms not only has some innovations in theory, but also has great value in practice.

Contract design for relay incentive mechanism under dual asymmetric information in cooperative networks

2017 ◽  
Vol 24 (8) ◽  
pp. 3029-3044 ◽  
Author(s):  
Nan Zhao ◽  
Rui Liu ◽  
Yang Chen ◽  
Minghu Wu ◽  
Yunhao Jiang ◽  
...  
Keyword(s):  
Asymmetric Information ◽  
Incentive Mechanism ◽  
Contract Design ◽  
Cooperative Networks ◽  
Relay Incentive
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