The Evolution of Market Price Efficiency Around Earnings News

2018 ◽  
Author(s):  
Charles Martineau
Keyword(s):  
Market Price ◽  
Price Efficiency

THE EFFECT OF CONTRACT STRUCTURE ON PREDICTION MARKET PRICE BIASES

2012 ◽  
Vol 3 (3) ◽  
pp. 1-12
Author(s):  
Richard Borghesi
Keyword(s):  
Significant Role ◽  
Market Price ◽  
Prediction Markets ◽  
Prediction Market ◽  
Price Efficiency ◽  
Combine Score ◽  
Structural Differences ◽  
Unbiased Estimates ◽  
Contract Structure

Prediction markets add value when they produce unbiased forecasts.  However, several prior studies find persistent biases when examining prediction market sides contracts.  Sides contracts represent bets on whether the score differential between two teams in a contest will be greater or less than a stated value.  We propose that inferences generated from examining Tradesports’ sides contracts may be problematic because they are framed exclusively with respect to favorites.  If a favorite-longshot (or reverse favorite-longshot) bias causes these deviations from rationality, it may be that non-sports-related (e.g., internal corporate) prediction markets assets do not suffer from the same shortcomings.  To evaluate the generalizability of prior findings, we contrast the price efficiency of Tradesports’ sides and totals contracts.  In totals wagers, traders take a position on whether the combine score of both teams in a game will be above or below a stated value.  We find that the fundamental structural differences between totals contracts and sides contracts partly determine differences in price efficiencies.  Relative to those in the sides market, some price biases in the totals market are significantly smaller in magnitude, and others are absent altogether.  Results indicate that contract structure plays a significant role in the ability of prediction markets to produce unbiased estimates.

Why Do Short Selling Bans Increase Adverse Selection and Decrease Price Efficiency?

2020 ◽  
Author(s):  
Peter N Dixon
Keyword(s):  
Empirical Evidence ◽  
Adverse Selection ◽  
Information Acquisition ◽  
Market Price ◽  
Negative Information ◽  
Short Selling ◽  
Price Efficiency ◽  
Theoretical Predictions

Abstract When short selling is costly, owners of an asset have greater incentive to become informed than nonowners because trading on negative information is easier for them. Thus, information acquisition concentrates among investors owning the asset. A short selling ban restricts selling to only the relatively more informed investors who own the asset, increasing adverse selection but only on the sell side of the market. Price efficiency declines due to less overall information acquisition because a ban magnifies the disincentive to gather information for investors not owning the asset. Empirical evidence from the 2008 U.S. short selling ban is consistent with these theoretical predictions. (JEL G10, G14, G18)

scholarly journals GOVERNANCE THROUGH STOCK TRADING IN BRAZIL: EVIDENCE WITH INSTITUTIONAL INVESTORS

2020 ◽  
Vol 21 (6) ◽  
Author(s):  
LUCAS N. C. VASCONCELOS ◽  
ORLEANS S. MARTINS
Keyword(s):  
Stock Market ◽  
Institutional Investors ◽  
Stock Prices ◽  
Stock Price ◽  
Market Price ◽  
Abnormal Returns ◽  
Specific Information ◽  
Stock Trading ◽  
Price Efficiency ◽  
Stock Market Efficiency

ABSTRACT Purpose: This paper analyses the viability of stock trading as a mechanism to promote corporate governance, addressing its effects on abnormal returns, information, and firm performance. Originality/value: The study indicates that competition among institutional investors is important to raise stock price efficiency. Policies that allow capital inflow, increase in liquidity, and a link between managers’ salaries and stock performance are beneficial to reinforce the stock market efficiency. Design/methodology/approach: Hypotheses testing using panel data regressions of 233 stocks between December 2009 to December 2017 from Thomson Eikon, Economatica and ComDinheiro. Findings: The results indicate that the number of institutional investors is not related to abnormal returns. On the other hand, the number of institutional investors increases the amount of firm-specific information into stock prices, rising stock market price efficiency. This relationship is stronger among the preferred stocks (PN), but this mechanism is still not valid to increase firms’ operational performance. Despite the possible increase in stock price efficiency, the investors cannot adopt such a mechanism to exercise governance if there is no remuneration linked to performance.

PENGARUH IT SPENDING TERHADAP KINERJA PERUSAHAAN PADA PERUSAHAAN TELEKOMUNIKASI YANG TERDAFTAR DI BURSA EFEK SELURUH ASIA TENGGARA PADA TAHUN 2009-2011

MODUS ◽  
2016 ◽  
Vol 26 (2) ◽  
pp. 93
Author(s):  
Irene Adrayani
Keyword(s):  
Stock Price ◽  
Sampling Method ◽  
Capital Expenditure ◽  
Stock Exchange ◽  
Market Price ◽  
Market Value ◽  
Company Performance ◽  
Corporate Value ◽  
Accounting Information System ◽  
Company Value

This study aims to get empirical evidence about the infuence of IT spending on corporate value by testing the efect of IT spending on corporate value by using Tobin’s Q. Te higher the stock price, the higher the company value as well as investors’ assessment. The market price of the company’s stocks refects investors’ assessment of the overall equity held. Of the stock price refects investor can provide an assessment of a company. Tobin’s Q is the ratio of the market value of the company’s assets as measured by the market value of the outstanding stocks and debt (enterprise value) to the replacement cost of the assets of the company. The sampling method is based on purposive sampling method with the purpose to obtain a sample that meets the criteria. Tis study used a sample taken from a telecommunications company listed on the Stock Exchange throughout Southeast Asia during the period of 2009-2011. The hypothesis in this study was tested using simple regression. Based on data analysis, the result that the variable IT spending does not afect the company value.Keywords: accounting information system, Tobin’s Q, IT spending, capital expenditure, company performance

Effect of Market Price on Economic Earnings

1958 ◽  
Vol 14 (5) ◽  
pp. 67-67
Author(s):  
F.W. Elliott Farr
Keyword(s):  
Market Price
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