Asymmetric Information In Financial Economics

Author : Fabrizio Mattesini
Publisher : Dartmouth Publishing Company
Page : 208 pages
File Size : 50,8 Mb
Release : 1993
Category : Business & Economics
ISBN : UOM:39015029250852

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Financial Markets, Asymmetric Information, and Macroeconomic Equilibrium by Fabrizio Mattesini Pdf

The study of the interaction between the financial sector and the sector of the economy is one of the most recent advances in macroeconomic theory. While mainstream economics assigns a passive role to the financial sector there is a growing body of literature which emphasizes the importance of financial intermediaries in explaining fluctuations and the determination of the process through which monetary policy impulses are transmitted to the rest of the economy. This literature has its origin in the models that rely on asymmetric information to explain imperfections in financial markts and in empirical evidence collected through various econometric techniques and through historical studies. This book surveys the relevant work ion the subject, evaluates the empirical evidence and the explanatory power of the theories proposed and furnishes new and empirical results.

Author : B. Hillier
Publisher : Bloomsbury Publishing
Page : 199 pages
File Size : 42,6 Mb
Release : 1997-04-07
Category : Business & Economics
ISBN : 9781349254859

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The Economics of Asymmetric Information by B. Hillier Pdf

This book presents recent developments in the economics of asymmetric information. The problems of selection and moral hazard, with hidden actions or hidden information, are introduced by examining how they affect the market for investment finance. The ideas are then used to analyse the market for insurance, signalling and screening models of education, efficiency wages, industrial regulation, public procurement and auctions. Coverage is thorough while avoiding excessive mathematical detail. Diagrams and verbal reasoning make the ideas accessible to intermediate level undergraduate students and beyond.

Author : Ricardo N. Bebczuk
Publisher : Cambridge University Press
Page : 176 pages
File Size : 52,5 Mb
Release : 2003-08-21
Category : Business & Economics
ISBN : 0521797322

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Asymmetric Information in Financial Markets by Ricardo N. Bebczuk Pdf

Asymmetric information (the fact that borrowers have better information than their lenders) and its theoretical and practical evidence now forms part of the basic tool kit of every financial economist. It is a phenomenon that has major implications for a number of economic and financial issues ranging from both micro and macroeconomic level - corporate debt, investment and dividend policies, the depth and duration of business cycles, the rate of long term economic growth - to the origin of financial and international crises. Asymmetric Information in Financial Markets aims to explain this concept in an accessible way, without jargon and by reducing mathematical complexity. Using elementary algebra and statistics, graphs, and convincing real-world evidence, the author explores the foundations of the problems posed by asymmetries of information in a refreshingly accessible and intuitive way.

Author : R. Glenn Hubbard
Publisher : University of Chicago Press
Page : 354 pages
File Size : 54,6 Mb
Release : 2009-05-15
Category : Business & Economics
ISBN : 9780226355948

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Asymmetric Information, Corporate Finance, and Investment by R. Glenn Hubbard Pdf

In this volume, specialists from traditionally separate areas in economics and finance investigate issues at the conjunction of their fields. They argue that financial decisions of the firm can affect real economic activity—and this is true for enough firms and consumers to have significant aggregate economic effects. They demonstrate that important differences—asymmetries—in access to information between "borrowers" and "lenders" ("insiders" and "outsiders") in financial transactions affect investment decisions of firms and the organization of financial markets. The original research emphasizes the role of information problems in explaining empirically important links between internal finance and investment, as well as their role in accounting for observed variations in mechanisms for corporate control.

Author : Ejike Ezejiofor
Publisher : GRIN Verlag
Page : 21 pages
File Size : 54,7 Mb
Release : 2014-11-18
Category : Business & Economics
ISBN : 9783656841449

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Corporate Finance Under Asymmetric Information by Ejike Ezejiofor Pdf

Seminar paper from the year 2014 in the subject Economics - Finance, , course: MBA and Engineering, language: English, abstract: The specter of decreased economic activities, financial crisis, unbecoming ethical standards have in the recent past and fore going, characterized asymmetric information on corporate finance. The consequences normally have a ricochet effect and can be generally catastrophic to normal economic activities to mention the least. This paper considers scenario’s where information asymmetry was prevalent or may have had its effects play out. The typical investor mindset and the opportunity cost associated with the preferred capital structure of the capitalizing process were mentioned. A basis for proper appreciation of the concept – Corporate finance under asymmetric information was initiated here, with a detailed explanation of corporate finance and its components, this was succeeded by a summary of scenarios were asymmetric information were prevalent and an intelligent look was also taken at asymmetric information between insiders and investors and the concomitant lemon problem, where the effects were carefully highlighted in a progression to the level of severity - Market breakdown and costly signaling. The fact that asymmetric information has been widely recognized as bad and generally viewed in a negative light must warrant it being viewed with a high level of seriousness. It is widely known that while lot of effort have been put into stemming the tides of the consequences of asymmetric information, a lot of effort too, have been dedicated to innovation and risk assessment, to capture the interest of investors, who have been affected by the consequences of asymmetric information. These may have formed a veritable platform for a recent paper by Pierre Barbaroux (2014), that elucidated the rise of innovation and innovative entrepreneurs based on the management of asymmetric information. An attempt has in any case, been made here to suggest efforts at marginalizing the negative impacts of asymmetric information and also remedies at reducing the far reaching impacts on the lenders and the aggregate economic activity in general.

Author : Indian Economic Association. Annual Conference
Publisher : Deep and Deep Publications
Page : 248 pages
File Size : 44,9 Mb
Release : 2006
Category : Business & Economics
ISBN : 8176298263

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Economics of Asymmetric Information by Indian Economic Association. Annual Conference Pdf

Contributed papers presented at the one of the technical sessions of Indian Economic Association's 85th conference held at the Kerala University in 2002.

Author : Mr.George C. Anayotos
Publisher : International Monetary Fund
Page : 28 pages
File Size : 52,5 Mb
Release : 1994-07-01
Category : Business & Economics
ISBN : 9781451955781

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Information Asymmetries in Developing Country Financing by Mr.George C. Anayotos Pdf

This paper assesses the impact of information asymmetries on developing country financing and considers alternative techniques to reduce the adverse implications of such asymmetries. Following an introduction, Section II examines in general terms the role of information in financial markets and analyzes the incentive and risk sharing properties of alternative financial contracts. Information asymmetries which are present in domestic finance are more prevalent in international finance, in particular in developing country financing. Section III reviews measures aiming to resolve information asymmetries. Borrowing and creditor country regulations and policies, as well as innovative contractual agreements help to resolve a range of issues related to information asymmetries. However, despite their contribution, residual problems remain unresolved. The international financial institutions, and in particular the Fund, have an important role to play in alleviating information asymmetries.

Author : Lewis Gaul,Viktors Steburnovs
Publisher : CreateSpace
Page : 32 pages
File Size : 48,6 Mb
Release : 2015-01-01
Category : Electronic
ISBN : 150531030X

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Ownership and Asymmetric Information Problems in the Corporate Loan Market by Lewis Gaul,Viktors Steburnovs Pdf

In credit markets, asymmetric information problems arise when borrowers have private information about their creditworthiness that is not observable by lenders. If these informational asymmetries do not negatively affect lenders' profitability, then they are irrelevant to lenders.

Author : Markus K. Brunnermeier,Markus Konrad Brunnermeier
Publisher : Oxford University Press on Demand
Page : 261 pages
File Size : 44,6 Mb
Release : 2001
Category : Business & Economics
ISBN : 9780198296980

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Asset Pricing Under Asymmetric Information by Markus K. Brunnermeier,Markus Konrad Brunnermeier Pdf

The role of information is central to the academic debate on finance. This book provides a detailed, current survey of theoretical research into the effect on stock prices of the distribution of information, comparing and contrasting major models. It examines theoretical models that explain bubbles, technical analysis, and herding behavior. It also provides rational explanations for stock market crashes. Analyzing the implications of asymmetries in information is crucial in this area. This book provides a useful survey for graduate students.

Author : Spyros Pagratis
Publisher : Unknown
Page : 364 pages
File Size : 54,5 Mb
Release : 2005
Category : Electronic
ISBN : OCLC:940149669

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Asymmetric information in financial economics by Spyros Pagratis Pdf

Author : Patrick Avato
Publisher : GRIN Verlag
Page : 29 pages
File Size : 44,6 Mb
Release : 2012-05
Category : Business & Economics
ISBN : 9783656180869

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Banks, Informal Money Lenders and Asymmetric Information by Patrick Avato Pdf

Seminar paper from the year 2005 in the subject Economics - Monetary theory and policy, grade: A= 1,0, Johns Hopkins University (School of Advanced International Studies (SAIS)), course: Theories and Models of Economic Development, 29 entries in the bibliography, language: English, abstract: Credit markets in developing countries differ substantially from their counterparts in OECD countries. Apart from the obvious differences in institutional development, technology and productivity which are both measures for and causes of underdevelopment, typ ical LDC credit markets have two main characteristics. Firstly, their financial systems are very small compared those in industrial economies. Secondly, developing countries are characterized by very big informal financial sectors that coexist with formal credit institutions. Interestingly, credit contracts differ highly between these two sectors and there seems to be only very limited inter-sector competition. The following paper ventures to explain the persistence of these peculiarities in rural credit markets1 using the model of asymmetric information in credit markets developed by Stiglitz and Weiss. By applying the model specifically to LDC credit markets I show that asymmetric information is among the major reasons for the underdevelopment of rural credit markets. Building on these findings I then explain how Microfinance Institutions (MFI) have lately been able to overcome some of the problems of imperfect information and strive in markets formerly dominated by informal money lenders. The first part of this paper provides an overview of the typical characteristics of credit markets in developing countries, concentrating on the limited size of LDC credit markets and on the apparent dichotomy between formal and informal finance sectors. Then, the importance of financial systems for economic development is briefly outlined in order to explain the relevance of the topic of this essay. The main part of the paper then pre

Author : Peter D. Spencer
Publisher : OUP Oxford
Page : 286 pages
File Size : 43,9 Mb
Release : 2000-10-12
Category : Business & Economics
ISBN : 9780191586866

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The Structure and Regulation of Financial Markets by Peter D. Spencer Pdf

Aimed at advanced undergraduate and graduate students in economics, banking, and finance, this is a core textbook for the financial markets, institutions, and regulation option of courses in financial economics. It integrates modern theories of asymmetric information into the analysis of financial institutions, relating the theory to current developments. The text begins with an analysis of adverse selection in retail financial products like life assurance before looking at open capital markets where trades and prices provide information. It then progresses to the more complex areas of corporate governance and financial intermediation in which information is concealed or confidential and moral hazard and verification problems become important. These chapters study the various mechanisms that the financial markets have developed to allow investors to delegate the management of their assets to others. This analysis is used to show how regulation can reduce the risk of financial failure and how legal, accounting, and regulatory mechanisms can help shape a country's corporate and financial architecture. These difficult theoretical concepts are conveyed through the careful use of numerical illustrations and topical case studies. Each chapter ends with a set of exercises to test and reinforce students' comprehension of the material. Worked solutions are provided for the numerical exercises.

Author : Mr.Giovanni Dell'Ariccia
Publisher : International Monetary Fund
Page : 32 pages
File Size : 50,7 Mb
Release : 1998-06-01
Category : Business & Economics
ISBN : 9781451951547

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Asymmetric Information and the Market Structure of the Banking Industry by Mr.Giovanni Dell'Ariccia Pdf

The paper analyzes the effects of informational asymmetries on the market structure of the banking industry in a multi-period model of spatial competition. All lenders face uncertainty with regard to borrowers’ creditworthiness, but, in the process of lending, incumbent banks gather proprietary information about their clients, acquiring an advantage over potential entrants. These informational asymmetries are an important determinant of the industry structure and may represent a barrier to entry for new banks. The paper shows that, in contrast with traditional models of horizontal differentiation, the steady-state equilibrium is characterized by a finite number of banks even in the absence of fixed costs.

Author : Bianconi Marcelo
Publisher : World Scientific Publishing Company
Page : 496 pages
File Size : 52,7 Mb
Release : 2011-11-29
Category : Business & Economics
ISBN : 9789814405126

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Financial Economics, Risk And Information (2nd Edition) by Bianconi Marcelo Pdf

Financial Economics, Risk and Information presents the fundamentals of finance in static and dynamic frameworks with focus on risk and information. The objective of this book is to introduce undergraduate and first-year graduate students to the methods and solutions of the main problems in finance theory relating to the economics of uncertainty and information. The main goal of the second edition is to make the materials more accessible to a wider audience of students and finance professionals. The focus is on developing a core body of theory that will provide the student with a solid intellectual foundation for more advanced topics and methods. The new edition has streamlined chapters and topics, with new sections on portfolio choice under alternative information structures. The starting point is the traditional mean-variance approach, followed by portfolio choice from first principles. The topics are extended to alternative market structures, alternative contractual arrangements and agency, dynamic stochastic general equilibrium in discrete and continuous time, attitudes towards risk and towards inter-temporal substitution in discrete and continuous time; and option pricing. In general, the book presents a balanced introduction to the use of stochastic methods in discrete and continuous time in the field of financial economics.

Author : Marcelo Bianconi
Publisher : World Scientific
Page : 496 pages
File Size : 54,9 Mb
Release : 2011-08-23
Category : Business & Economics
ISBN : 9789814355131

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Financial Economics, Risk and Information by Marcelo Bianconi Pdf

Financial Economics, Risk and Information presents the fundamentals of finance in static and dynamic frameworks with focus on risk and information. The objective of this book is to introduce undergraduate and first-year graduate students to the methods and solutions of the main problems in finance theory relating to the economics of uncertainty and information. The main goal of the second edition is to make the materials more accessible to a wider audience of students and finance professionals. The focus is on developing a core body of theory that will provide the student with a solid intellectual foundation for more advanced topics and methods. The new edition has streamlined chapters and topics, with new sections on portfolio choice under alternative information structures. The starting point is the traditional mean-variance approach, followed by portfolio choice from first principles. The topics are extended to alternative market structures, alternative contractual arrangements and agency, dynamic stochastic general equilibrium in discrete and continuous time, attitudes towards risk and towards inter-temporal substitution in discrete and continuous time; and option pricing. In general, the book presents a balanced introduction to the use of stochastic methods in discrete and continuous time in the field of financial economics.