scholarly journals Efficiency of the Experimental Prediction Market: Public Information, Belief Evolution, and Personality Traits

2021 ◽  
pp. 39-59
Author(s):  
Bin-Tzong Chie ◽  
Chih-Hwa Yang
Keyword(s):  
Personality Traits ◽  
Private Information ◽  
Positive Impact ◽  
Market Price ◽  
Public Information ◽  
Jel Classification ◽  
Public And Private ◽  
Market Prices ◽  
Aggregate Information ◽  
Experimental Prediction

Abstract This paper examines the ability of markets to aggregate information so that the price generated from the market contains the best estimate of all the available information. The paper investigates how individuals “update” their initial beliefs from their public and private information in light of market prices. In particular, the paper looks at individuals' weighting of public information versus private information. Also, the volume of information in the market via an increased number of traders with private information has a positive impact on the quality of the market price. Lastly, the personality traits of the traders seem to provide some positive impact if the traders are diverse in terms of the proportion of “efficient and organized” traders in the market. JEL classification numbers: C91, C92, D82 Keywords: Experimental economics, Prediction markets, Belief, Market efficiency, Personality traits.

Why Do IPO Offer Prices Only Partially Adjust?

2014 ◽  
Vol 04 (03) ◽  
pp. 1450009 ◽  
Author(s):  
Özgür Ş. İnce
Keyword(s):  
Initial Public Offering ◽  
Private Information ◽  
Information Acquisition ◽  
Structural Model ◽  
Public Information ◽  
Public And Private ◽  
New Information ◽  
Pricing Process ◽  
Ipo Pricing ◽  
Public Offering

This study develops a structural model of the initial public offering (IPO) pricing process that enables the estimation of adjustment rates for public and private pricing information gathered during bookbuilding. The estimated upward adjustment rate of public information is only 21%, significantly less than the 28% rate of private information. Adjustment rates decline towards the IPO date, especially for upward adjustments. The findings contradict information acquisition theories that predict a complete adjustment to public information and highlight the inefficiency of the IPO bookbuilding mechanism in handling new information even when information is publicly available and especially when it is favorable.

scholarly journals School Quality and Parental Schooling Decisions for Their Children: Public and Private Schools in Rural Pakistan

2019 ◽  
Vol 58 (2) ◽  
pp. 177-202
Author(s):  
Muhammad Jehangir Khan
Keyword(s):  
Private Schools ◽  
Parental Education ◽  
School Quality ◽  
Positive Impact ◽  
School Attendance ◽  
Household Survey ◽  
Jel Classification ◽  
Public And Private ◽  
Number Of Children ◽  
Rural Pakistan

This study uses the Pakistan Rural Household Survey 2004-5 (PRHS), a rich set of households and school data, to examine parents’ schooling decision in rural Pakistan. Nested logit regressions are used to quantify the determinants of child school attendance. The analysis confirms that the greater the number of schools (public or private) in the local communities the higher is the attendance. Lower school attendance of boys seems to be the outcome of lower school quality more than it is for girls. A marginal increase in school quality correlates with increased school attendance in government schools more than in private schools. Nearly all school quality variables including control for number of schools in a community stand insignificant for girls. This shows that other factors might be of more importance than school quality of local schools for girl’s low attendance in rural Pakistan. Besides, parental education, especially mother’s education, and household income have strong positive impact on child school attendance. The greater the number of children in the household the lower is the child school attendance. Credit constraint seems not to be problematic as the estimated effect is statistically insignificant. The size of landholding seems to be important only in the case of girls schooling. JEL Classification: I21, I25, D13, C25 Keywords: Demand for Schooling, Public Education, Private Education, Pakistan

Protection Against Wine Price Risks: A Real Option Approach

2007 ◽  
Vol 2 (2) ◽  
pp. 168-186 ◽  
Author(s):  
Jean-Laurent Viviani
Keyword(s):  
Real Option ◽  
Positive Impact ◽  
Market Price ◽  
Jel Classification ◽  
Management Tool ◽  
Traditional Role ◽  
Strike Price ◽  
Protection Mechanism ◽  
Price Risks ◽  
Current Price

AbstractSince the beginning of 2006, the federation of wine producers (Inter-Rhône) offers its members (wine producers of the Rhône Valley) protection against wine price risks giving them the option to sell a portion of their production at €80 per hl, regardless of the prevailing market price. This risk management tool has the general features of an American put option with a strike price of 80 €/hl. Two mechanisms are used to reduce the hedging cost: the introduction of a barrier “up and out”, and the option to force producers to implement a non-optimal exercise strategy. We present two pricing models of this option (with and without barrier) followed by an application using the Inter-Rhône wine price data base. The cost of the first protection mechanism (without barrier) is about €10 per hi (i.e., 13.3 % of the current price) but only about €8 for the second (with barrier) representing 10.7 % of the current price. Beyond its traditional role of protection against price fluctuation, the option may also have a positive impact on price levels by stopping panic movements and strengthening the negotiating power of producers. (JEL Classification: Q14, G32)

Voluntary IFRS Adoption, Analyst Coverage, and Information Quality: International Evidence

2012 ◽  
Vol 11 (1) ◽  
pp. 45-76 ◽  
Author(s):  
Jeong-Bon Kim ◽  
Haina Shi
Keyword(s):  
Financial Reporting ◽  
Private Information ◽  
Information Quality ◽  
Public Information ◽  
Public And Private ◽  
Analyst Coverage ◽  
Financial Reporting Standards ◽  
Common Information ◽  
Ifrs Adoption ◽  
Information Set

ABSTRACT This study investigates whether and how a firm's voluntary adoption of International Financial Reporting Standards (IFRS) affects financial analysts' decisions to follow the firm, and improves the information environment, as reflected in the precision of the analysts' information set. First, this study finds that firms with voluntary IFRS adoptions attract more analysts than non-adopter firms. Second, it finds that the added disclosure via IFRS adoption contributes to the better precision of the analyst information set. Third, this study finds that the improved precision of total analyst information is attributed to not only an increase in the precision of public information common to all analysts, but also an increase in the precision of private information that is idiosyncratic to a particular analyst. This finding suggests a complementary relation with respect to the effect of IFRS adoption on the quality of public and private information. Finally, further analysis reveals that analyst coverage also improves the precision of information. Specifically, this study provides evidence suggesting that voluntary IFRS adoption is associated with more precise public (common) information, while analyst coverage is associated with more precise private (idiosyncratic) information.

Public and Private Partner Selection in Battle of Sexes

2015 ◽  
Vol 6 (2) ◽  
pp. 47-64
Author(s):  
Pedro Mariano ◽  
Davide Nunes ◽  
Luís Correia
Keyword(s):  
Private Information ◽  
Public Information ◽  
Partner Selection ◽  
Population Diversity ◽  
Minor Role ◽  
Public And Private ◽  
Is Strategy ◽  
Opinion Model ◽  
A Minor

In this paper the authors investigate what factors can promote population diversity. They compare different partner selection models and strategy mobility on the Battle of Sexes game. This is a game with a coordination dilemma where players must decide which event to attend given that each one has its preferred event but they prefer going together. They investigate two types of partner selection: one based in private information and another based on public information, which is based on an opinion model. The authors analyze two variants of the opinion model. Experimental analysis shows that partner selection plays a minor role of favoring population diversity. One of the most important factors is strategy mobility either implicitly through mutation or explicitly when an offspring is placed in a different location.

Public REITs' governance and regulatory structure: effects on NAV discount

2010 ◽  
Vol 3 (3) ◽  
pp. 161-181 ◽  
Author(s):  
Massimo Biasin ◽  
Emanuela Giacomini ◽  
Anna Grazia Quaranta
Keyword(s):  
Positive Impact ◽  
Market Price ◽  
Regulatory Structure ◽  
Real Estate Investment ◽  
Market Prices ◽  
Content Type ◽  
Market Dynamic ◽  
Asset Values ◽  
Italian Context ◽  
Share Value

PurposeThe purpose of this paper is to investigate the influence of the Italian real estate investment trusts (REITs)' governance and regulatory structure on the market prices discount to net asset values (NAV).Design/methodology/approachThe hypothesis is that the overall regulatory design and the rules for prudential vigilance (i.e. governance rights, closed‐end form, leverage constraints, and mandatory listing) influence REITs' share value, both as market price and as NAV). In particular, the analysis focuses on the effects of the recent introduction of a shareholders' meeting in the articles of association of newly established REITs that pursues a better alignment of interests between managers and shareholders.FindingsThe original results show that the NAV discount decreases as long as time to maturity of the fund decreases. Conversely, the NAV discount is negatively affected by share turnover (as a proxy of the liquidity generated by the mandatory listing provision) and leverage. The regulatory provision of a shareholders' meeting appears to have improved the investors' governance capability having a positive impact on the NAV discount. The different sensitivity of market prices and NAVs to the regulatory variables investigated suggests the need to consider this dichotomy when defining or amending the regulatory set ruling REITs' operations and market dynamic.Originality/valueThis paper is the first in the Italian context to specifically consider the effect of the regulatory environment on the NAV discount. In particular, the effect of the regulatory provision of a shareholders' meeting has never been investigated before.

How Much Information Is Incorporated into Financial Asset Prices? Experimental Evidence

2020 ◽  
Author(s):  
Lionel Page ◽  
Christoph Siemroth
Keyword(s):  
Financial Market ◽  
Private Information ◽  
Public Information ◽  
Asset Markets ◽  
Informational Content ◽  
Financial Asset ◽  
Informational Efficiency ◽  
Market Prices ◽  
Market Experiments ◽  
Do So

Abstract We investigate the informational content of prices in financial asset markets. To do so, we use a large number of market experiments in which the amount of information held by traders is precisely observed. We derive a new method to estimate how much of this information is incorporated into market prices. We find that public information is almost completely reflected in prices but that surprisingly little private information—less than 50%—is incorporated into prices. Our estimates therefore suggest that, while semistrong informational efficiency is consistent with the data, financial market prices may be very far from strong-form efficiency.

scholarly journals Beyond Banks’ Capitalization: What Affects the Credit Lines?

2017 ◽  
Vol 8 (4) ◽  
pp. 71
Author(s):  
Carmen Gallucci ◽  
Vincenzo Formisano ◽  
Michele Modina ◽  
Rosalia Santulli
Keyword(s):  
Panel Data ◽  
Private Information ◽  
Regression Models ◽  
Direct Relationship ◽  
Public Information ◽  
Private Firms ◽  
Public And Private ◽  
Credit Lines ◽  
The Relationship ◽  
Credit Granting

The present paper aims at investigating what affects the credit granting beyond banks’capitalization. It focuses on public and private firms’ information available for the banks. We apply moderating regression models on panel data. Our sample is of 123 co-operative credit banks and more than 11,000 firms operating in Italy between 2012 and 2014, for 18,143 observations. Our main findings suggest that firms’ profitability (public information) positively moderates the direct relationship between banks’ capitalization and credit grants; differently, multiple banking, overdue payment and credit limit violation days (private information) negatively moderate the above-cited relationship. Finally, the conjoint moderating effect of public and private information proves to be negative, thus also firms with a good profitability are penalized in credit grant whether they do not take care the relationship with banks.

scholarly journals An Investigation Of The Comparative Impact Of Degree Of Implementation Of IFRS Upon The Public And Private Information Quality Of Asia Pacific Country Firms

2010 ◽  
Vol 9 (3) ◽  
Author(s):  
Arsen Djatej ◽  
Grace Gao ◽  
Robert H.S. Sarikas ◽  
David L. Senteney
Keyword(s):  
Private Information ◽  
Information Quality ◽  
Public Information ◽  
Earnings Forecasts ◽  
Asia Pacific ◽  
Public And Private ◽  
Institutional Infrastructure ◽  
Asia Pacific Country ◽  
Equity Securities

This research investigates the comparative quality of public and private information environments between firms domiciled in 15 Asia Pacific countries of which seven are characterized as market supportive institutional infrastructure.  Our empirical analyses examine the comparative quality of public and private information components of equity securities analysts’ earnings forecasts for Asia Pacific firms, while controlling for firms cross-listing on U.S. equity securities exchanges and  country of domicile degree of implementation of IFRS.  Our results indicate that the quality of private information is higher for non-market supportive infrastructure countries, as compared to market-supportive infrastructure countries of domicile, and the quality of public information is higher for market-supportive infrastructure as compared to non-market-supportive infrastructure countries of domicile.  Furthermore, and particularly noteworthy, is that our results indicate that country of domicile degree of implementation of IFRS increases the quality of public information and decreases the quality of private information for both market-supportive infrastructure and non-market-supportive infrastructure countries of domicile, and also that the decrease in the quality of private and increase in the quality of public information associated with degree of implementation of IFRS are significantly more pronounced for market-supportive infrastructure countries relative to non-market-Supportive infrastructure countries of domicile.  We believe that our results suggest that IFRS is more beneficial for countries having market supportive institutional infrastructure in place as compared with those who do not.

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