scholarly journals Informational Price Cascades and Non-Aggregation of Asymmetric Information in Experimental Asset Markets

Author(s):  
Jason Shachat ◽  
Anand Srinivasan
2010 ◽  
Vol 14 (2) ◽  
pp. 223-240 ◽  
Author(s):  
Jürgen Huber ◽  
Martin Angerer ◽  
Michael Kirchler

2002 ◽  
Vol 21 (1) ◽  
pp. 11-27 ◽  
Author(s):  
Brad Tuttle ◽  
Maribeth Coller ◽  
R. David Plumlee

Auditors are faced with the dilemma of inferring materiality based, in part, on whether a given level of financial misstatement will affect the decisions of statement users. Misstatements in accounting information that are below the materiality threshold are not expected to change users' assessments of a company's economic condition. While the auditing profession accepts materiality in concept, its application in practice is more controversial. In certain settings, the nature of a misstatement, such as changing a small profit into a loss, may affect an auditor's materiality judgment. However, in many cases the magnitude of the misstatement is a critical factor in judging materiality. We focus solely on the issue of magnitude and examine whether financial misstatements that are at or below commonly applied materiality thresholds result in market prices that differ from those resulting from correctly stated information. We conduct a series of 12 experimental asset markets each consisting of 12 independent three-minute trading periods with six traders in each market. We then compare prices for companies generated by markets that are provided either correctly stated information, information containing misstatements that would typically be considered immaterial, or information containing material misstatements. Results indicate that undisclosed misstatements within materiality thresholds that are consistent with current audit practice do not affect market prices, while misstatements well above these thresholds do.


2021 ◽  
Author(s):  
Karlijn Hoyer ◽  
Stefan Zeisberger ◽  
Marcel Zeelenberg ◽  
Seger Breugelmans

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Anuj Bhowmik ◽  
Maria Gabriella Graziano

AbstractThis paper analyses two properties of the core in a two-period exchange economy under uncertainty: the veto power of arbitrary sized coalitions; and coalitional fairness of core allocations. We study these properties in relation to classical (static) and sequential (dynamic) core notions and apply our results to asset markets and asymmetric information models. We develop a formal setting where consumption sets have no lower bound and impose a series of general restrictions on the first period trades of each agent. All our results are applications of the same lemma about improvements to an allocation that is either non-core or non-coalitionally fair. Roughly speaking, the lemma states that if all the members of a coalition achieve a better allocation in some way (for instance, by blocking the status quo allocation or because they envy the net trade of other coalitions) then an alternative improvement can be obtained through a perturbation of the initial improvement.


2014 ◽  
Vol 40 ◽  
pp. 179-194 ◽  
Author(s):  
Martin Holmen ◽  
Michael Kirchler ◽  
Daniel Kleinlercher

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