Initial Coin Offerings, Speculation, and Asset Tokenization

2020 ◽  
Author(s):  
Jingxing (Rowena) Gan ◽  
Gerry Tsoukalas ◽  
Serguei Netessine
Keyword(s):  
Moral Hazard ◽  
Operations Management ◽  
Firm Value ◽  
Agency Costs ◽  
Demand Uncertainty ◽  
Customer Demand ◽  
Demand Characteristics ◽  
Operating Strategy ◽  
Mean Variance ◽  
Initial Coin Offerings

Initial coin offerings (ICOs) are an emerging form of fundraising for blockchain-based startups. We examine how ICOs can be leveraged in the context of asset tokenization, whereby firms issue tokens backed by future assets (i.e., inventory) to finance growth. We (i) make suggestions on how to design such “asset-backed” ICOs—including optimal token floating and pricing for both utility and equity tokens (a.k.a. security token offerings)—taking into account moral hazard (cash diversion), product characteristics, and customer demand uncertainty; (ii) make predictions on ICO success/failure; and (iii) discuss implications on firm operating strategy. We show that in unregulated environments, ICOs can lead to significant agency costs, underproduction, and loss of firm value. These inefficiencies, however, fade as product margins and demand characteristics (mean/variance) improve, and they are less severe under equity (rather than utility) token issuance. Importantly, the advantage of equity tokens stems from their inherent ability to better align incentives and thus continues to hold even absent regulation. This paper was accepted by Vishal Gaur, operations management.

Consumer Learning from Own Experience and Social Information: An Experimental Study

2020 ◽  
Author(s):  
Andrew M. Davis ◽  
Vishal Gaur ◽  
Dayoung Kim
Keyword(s):  
Service Quality ◽  
Rate Of Convergence ◽  
Market Share ◽  
Operations Management ◽  
Demand Uncertainty ◽  
Social Information ◽  
Demand Characteristics ◽  
Repeated Interaction ◽  
Different Types ◽  
Demand Variability

We investigate how different types of social information affect the demand characteristics of firms competing through service quality. We first generate behavioral hypotheses around both consumers’ learning behavior and firms’ corresponding demand characteristics: market share, demand uncertainty, and rate of convergence. We then conduct a controlled human-subject experiment in which a consumer chooses to visit one of two firms, each with unknown service quality, in a repeated interaction and is exposed to different information treatments from a social network: (1) no social information; (2) share-based social information, which details the percentage of people who visited each firm; (3) quality-based social information, which illustrates the percentage of people who received a satisfactory experience from each firm; or (4) full social information, which contains both share- and quality-based social information. A key insight from our study is that different types of social information have different effects on firms’ demand. First, promoting quality-based social information leads to a significantly higher market share, lower demand variability, and faster rate of convergence for a firm with significantly better service quality. Second, when the higher quality firm has only a marginal advantage over the other firm, promoting only share-based information leads to significantly higher market share and lower demand variability. A third important result is that providing only one type of social information can actually be more helpful to the higher quality firm than providing full social information. This paper was accepted by David Simchi-Levi, operations management.

scholarly journals A Theory of Crowdfunding: A Mechanism Design Approach with Demand Uncertainty and Moral Hazard

2017 ◽  
Vol 107 (6) ◽  
pp. 1430-1476 ◽  
Author(s):  
Roland Strausz
Keyword(s):  
Moral Hazard ◽  
Mechanism Design ◽  
Demand Uncertainty ◽  
Aggregate Demand ◽  
Agency Cost ◽  
Expected Returns ◽  
Cost Information ◽  
Private Cost ◽  
Incentive Problems ◽  
Do So

Crowdfunding provides innovation in enabling entrepreneurs to contract with consumers before investment. Under aggregate demand uncertainty, this improves screening for valuable projects. Entrepreneurial moral hazard and private cost information threatens this benefit. Crowdfunding's after-markets enable consumers to actively implement deferred payments and thereby manage moral hazard. Popular crowdfunding platforms offer schemes that allow consumers to do so through conditional pledging behavior. Efficiency is sustainable only if expected returns exceed an agency cost associated with the entrepreneurial incentive problems. By reducing demand uncertainty, crowdfunding promotes welfare and complements traditional entrepreneurial financing, which focuses on controlling moral hazard. (JEL D21, D81, D82, D86, G32, L26)

Buyer’s Bankruptcy Risk, Sourcing Strategy, and Firm Value: Evidence from the Supplier Protection Act

2021 ◽  
Author(s):  
Karca D. Aral ◽  
Erasmo Giambona ◽  
Ye Wang
Keyword(s):  
Operations Management ◽  
Financial Distress ◽  
Firm Value ◽  
Trade Credit ◽  
Treated Group ◽  
Control Group ◽  
Regulatory Change ◽  
Data Set ◽  
Bankruptcy Risk ◽  
Sourcing Strategy

What should a distressed buyer’s sourcing strategy be? We find that this depends on the dynamics in a potential in-court bankruptcy. To establish causality, we use a novel sourcing data set in combination with a unique quasi-natural experimental setting provided by a regulatory shock that significantly strengthened the protection granted to suppliers when a distressed buyer files for bankruptcy: the Supplier Protection Act. We find that, following this regulatory change, the number of suppliers for buyers near financial distress (those most affected by the act, the treated group) increased by nearly 35% relative to financially sound firms (the control group). We also find that this shift allowed distressed buyers to obtain more trade credit, expand inventory holdings, and increase performance, leading to an overall increase in firm value of 7.2%. In turn, these effects led to a sizable reduction in the probability of the affected buyers defaulting and filing for bankruptcy. Our results have important implications for corporate executives: right-sizing the supply base can be critical for buyers near financial distress, and implementing policies to engage and protect suppliers can be the way out of distress. This paper was accepted by Vishal Gaur, operations management.

scholarly journals KETERKAITAN MANAGERIAL OWNERSHIP DAN LEVERAGE TERHADAP NILAI PERUSAHAAN: DALAM KONTEK HUBUNGAN KEAGENAN PERUSAHAAN DI INDONESIA

2021 ◽  
Vol 5 (1) ◽  
pp. 160
Author(s):  
Margarita Ekadjaja ◽  
Rorlen Rorlen ◽  
Fanny Andriani Setiawan ◽  
Kartika Nuringsih
Keyword(s):  
Decision Making ◽  
Firm Value ◽  
Agency Costs ◽  
Least Square ◽  
Managerial Ownership ◽  
Corporate Value ◽  
Manufacturing Companies ◽  
Positive Interaction ◽  
Two Stage ◽  
The Relationship

Manajemen dan nilai perusahaan memiliki keterkaitan yang tidak dapat dipisahkan.  Dimana manajemen perusahaan merupakan penggerak roda perusahaan dan berorientasi pada nilai perusahaan. Peran seorang manajer adalah memaksimalkan kekayaan bagi pemegang saham.  Namun, manajer yang tidak memiliki kepemilikan saham yang signifikan di perusahaan dapat memilih untuk memaksimalkan keuntungan bersih mereka sendiri dengan mengorbankan pemilik perusahaan. Akibatnya, pemilik terpaksa mengeluarkan biaya agensi untuk memastikan bahwa manajemen perusahaan bertindak dengan cara yang tepat. Cara untuk mengurangi biaya agensi adalah memaksa perusahaan untuk meningkatkan hutang. Tujuan penelitian adalah  menguji hubungan simultan pertukaran antara ownership, leverage, dan nilai perusahaan sehubungan dengan keagenan pada perusahaan manufaktur di Indonesia dari tahun 2012-2018. Penelitian ini menambah pemahaman mengenai keterkaitan antara ownership dengan leverage, dan nilai perusahaan. Analisis data untuk argumen tentang keterkaitan simultan antara  ownership, leverage, dan nilai perusahaan melalui data panel regresi berganda 2 SLS (Two Stage Least Square). Bidang penelitian ini diperluas dengan mempertimbangkan model empiris di mana ownership dan leverage masing-masing diperlakukan sebagai variabel endogen atau ditentukan bersama.  Dalam metode 2 SLS ada 2 kali variabel yang diobservasi secara simultan untuk menghindari bayes sehingga variabel tersebut tidak bias, di mana variabel managerial ownership dan Leverage merupakan determinan non linier nilai perusahaan sebagai bagian integral dari pengambilan keputusan perusahaan dalam kerangka keagenan.  Persamaan Regresi hasil uji 2SLS memunjukkan keterkaitan nilai perusahaan dengan managerial ownership dan leverage. Hasil menunjukkan interaksi positif  tidak signifikan antara managerial ownerhip dengan nilai perusahaan, interaksi positif signifikan antara nilai perusahaan dengan leverage, dan interaksi yang negatif signifkan antara managerial ownership dengan leverage. Management and corporate value have an inseparable relationship. Where the company management is the driving force of the company and oriented to corporate values. The role of a manager is to maximize wealth of shareholders. However, managers who do not have a significant share in the company may choose to maximize their own net profits at the expense of the company owners. As a result, the owners are forced to incur agency costs to ensure that company management acts in an appropriate manner. The way to reduce agency costs is to force the company to increase debt. The research objective is to examine the exchange simultaneous relationship between ownership, leverage, and corporate value with respect to agency in manufacturing companies in Indonesia from 2012-2018. This study adds to the understanding of the relationship between ownership and leverage, and corporate value. Data analysis for arguments about the simultaneous relationship between ownership, leverage, and firm value through 2 SLS (Two Stage Least Square) multiple regression panel data. This field of research is extended by considering empirical models in which ownership and leverage are treated as endogenous or co-determined variables, respectively. Ownership and Leverage as an integral part of corporate decision making within an agency framework, which in turn will affect the value of the company. In the SLS 2 method, there are 2 variables that are observed simultaneously to avoid bayes so that the variable is not biased, in which the managerial ownership and leverage variables are nonlinear determinant corporate value as an integral part of corporate decision making within the agency framework, which in turn will affect firm value. The 2SLS regression equation results show the relationship between firm value and managerial ownership and leverage. The results prove that there is a positive interaction between managerial ownership between firm value, a significant positive interaction between firm value and leverage, and a significant negative interaction between managerial ownership and leverage.

Mean-Variance Model for the Build-Operate-Transfer Scheme Under Demand Uncertainty

2003 ◽  
Vol 1857 (1) ◽  
pp. 93-101 ◽  
Author(s):  
Anthony Chen ◽  
Kitti Subprasom ◽  
Zhaowang Ji
Keyword(s):  
Demand Uncertainty ◽  
Network Design Problem ◽  
Transfer Scheme ◽  
Nondominated Solutions ◽  
Variance Model ◽  
Traffic Demand ◽  
Simulation Based ◽  
Capacity Selection ◽  
Mean Variance

A mean-variance model was developed for determining the optimal toll and capacity in a build-operate-transfer (BOT) roadway project subject to traffic demand uncertainty. This mean-variance model involves two objectives: maximizing mean profit and minimizing the variance (or standard deviation) of profit. The variance associated with profit is considered as a risk. Because maximizing expected profit and minimizing risk are often conflicting, there may not be a single best solution that can simultaneously optimize both objectives. Hence, it is necessary to explicitly consider this as a multiobjective problem so that a set of nondominated solutions can be generated. In this study, the optimal toll and capacity selection for the BOT problem under demand uncertainty is formulated as a special case of the stochastic network design problem. A simulation-based multiobjective genetic algorithm was developed to solve this stochastic bilevel mathematical programming formulation. Numerical results are also presented as a case study.

Popular Evolution and Styles Reusability of Platform Shoes

2011 ◽  
Vol 291-294 ◽  
pp. 2517-2520
Author(s):  
Wen Li Peng ◽  
Juan Juan Tan ◽  
Wen Ni Zhang
Keyword(s):  
Current Status ◽  
Customer Demand ◽  
Functional Characteristics ◽  
Demand Characteristics

The origins and popular history and current status of platform shoes were introduced. The cycle and causes of its prevalence evolution were discussed. Customer demand characteristics, functional characteristics, modeling features and style characteristics of platform shoes were refined and studied, which laid the foundation for style reusing. The prevalence trend of platform shoes was predicted.

Kelly Solar

2017 ◽  
pp. 1-3
Author(s):  
Samuel E. Bodily ◽  
Marc L. Lipson ◽  
Kenneth C. Lichtendahl
Keyword(s):  
Firm Value ◽  
Agency Costs ◽  
Debt Overhang ◽  
Start Up ◽  
Outstanding Debt ◽  
Agency Costs Of Debt

A small start-up company must make additional investments to maximize its firm value. But the company owner will not make this investment unless she can renegotiate outstanding debt claims. Solving this “debt overhang” problem through negotiation is the focus of the case. In this context, students are exposed to a variety of issues: the nature of financial claims, bargaining and negotiation fundamentals, and agency costs of debt.

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