Asymmetric Information In Financial Markets

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Asymmetric Information in Financial Markets

Ricardo N. Bebczuk
Asymmetric Information in Financial Markets Book PDF

Author : Ricardo N. Bebczuk
Publisher : Cambridge University Press
Page : 176 pages
File Size : 47,8 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.

Financial Markets, Asymmetric Information, and Macroeconomic Equilibrium

Fabrizio Mattesini
Financial Markets Asymmetric Information and Macroeconomic Equilibrium Book PDF

Author : Fabrizio Mattesini
Publisher : Dartmouth Publishing Company
Page : 208 pages
File Size : 54,9 Mb
Release : 1993
Category : Capital market
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.

The Economics of Asymmetric Information

B. Hillier
The Economics of Asymmetric Information Book PDF

Author : B. Hillier
Publisher : Bloomsbury Publishing
Page : 199 pages
File Size : 47,5 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.

Asymmetric Information and the Market Structure of the Banking Industry

Mr.Giovanni Dell'Ariccia
Asymmetric Information and the Market Structure of the Banking Industry Book PDF

Author : Mr.Giovanni Dell'Ariccia
Publisher : International Monetary Fund
Page : 32 pages
File Size : 43,8 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.

Ownership and Asymmetric Information Problems in the Corporate Loan Market

Lewis Gaul,Viktors Steburnovs
Ownership and Asymmetric Information Problems in the Corporate Loan Market Book PDF

Author : Lewis Gaul,Viktors Steburnovs
Publisher : CreateSpace
Page : 32 pages
File Size : 52,9 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.

Asymmetric Information, Corporate Finance, and Investment

R. Glenn Hubbard
Asymmetric Information Corporate Finance and Investment Book PDF

Author : R. Glenn Hubbard
Publisher : University of Chicago Press
Page : 354 pages
File Size : 50,7 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.

Information Asymmetries in Developing Country Financing

Mr.George C. Anayotos
Information Asymmetries in Developing Country Financing Book PDF

Author : Mr.George C. Anayotos
Publisher : International Monetary Fund
Page : 28 pages
File Size : 55,9 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.

Asymmetric Information and Financial Markets

G. Manjunatha
Asymmetric Information and Financial Markets Book PDF

Author : G. Manjunatha
Publisher : Ary Publisher
Page : 0 pages
File Size : 43,7 Mb
Release : 2023-06-10
Category : Electronic
ISBN : 2391241755

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Asymmetric Information and Financial Markets by G. Manjunatha Pdf

This econometric analysis focuses on the relationship between asymmetric information and financial markets. The study aims to examine how the presence of asymmetric information affects market dynamics and outcomes. By utilizing advanced statistical techniques and econometric modeling, the research investigates the impact of information asymmetry on various financial market variables. The study analyzes the role of information asymmetry in influencing market efficiency, price formation, trading volume, and investor behavior. It explores how differences in information between market participants lead to market inefficiencies, such as mispricing and suboptimal trading strategies. Additionally, the research investigates the implications of asymmetric information for market liquidity, volatility, and the overall stability of financial markets. Through the econometric analysis, the study provides empirical evidence and insights into the effects of asymmetric information on financial markets. It aims to contribute to the existing literature by shedding light on the mechanisms through which information asymmetry influences market dynamics and outcomes. The findings have practical implications for investors, financial institutions, and policymakers, helping to enhance market transparency, investor protection, and the efficiency of financial markets. Overall, this econometric analysis delves into the relationship between asymmetric information and financial markets. By employing rigorous statistical techniques, it aims to understand the impact of information asymmetry on market variables, providing valuable insights for market participants and stakeholders. The research ultimately seeks to contribute to the understanding of market dynamics and inform strategies to mitigate the adverse effects of information asymmetry in financial markets.

Asset Pricing Under Asymmetric Information

Markus Konrad Brunnermeier
Asset Pricing Under Asymmetric Information Book PDF

Author : Markus Konrad Brunnermeier
Publisher : Oxford University Press, USA
Page : 264 pages
File Size : 44,9 Mb
Release : 2001
Category : Business & Economics
ISBN : 0198296983

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Asset Pricing Under Asymmetric Information by 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.

Banks, Informal Money Lenders and Asymmetric Information

Patrick Avato
Banks Informal Money Lenders and Asymmetric Information Book PDF

Author : Patrick Avato
Publisher : GRIN Verlag
Page : 29 pages
File Size : 45,9 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

The Structure and Regulation of Financial Markets

Peter D. Spencer
The Structure and Regulation of Financial Markets Book PDF

Author : Peter D. Spencer
Publisher : OUP Oxford
Page : 286 pages
File Size : 53,6 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.

The Oxford Handbook of Entrepreneurial Finance

Douglas Cumming
The Oxford Handbook of Entrepreneurial Finance Book PDF

Author : Douglas Cumming
Publisher : OUP USA
Page : 937 pages
File Size : 43,6 Mb
Release : 2012-03-22
Category : Business & Economics
ISBN : 9780195391244

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The Oxford Handbook of Entrepreneurial Finance by Douglas Cumming Pdf

Provides a comprehensive picture of issues dealing with different sources of entrepreneurial finance and different issues with financing entrepreneurs. The Handbook comprises contributions from 48 authors based in 12 different countries.

Economics of Asymmetric Information

Indian Economic Association. Annual Conference
Economics of Asymmetric Information Book PDF

Author : Indian Economic Association. Annual Conference
Publisher : Deep and Deep Publications
Page : 248 pages
File Size : 42,8 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.

Remedies to Informational Asymmetries in Stock Markets

Peter-Jan Engelen
Remedies to Informational Asymmetries in Stock Markets Book PDF

Author : Peter-Jan Engelen
Publisher : Intersentia nv
Page : 4 pages
File Size : 44,5 Mb
Release : 2005
Category : Securities
ISBN : 9789050954846

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Remedies to Informational Asymmetries in Stock Markets by Peter-Jan Engelen Pdf

Like many other markets, stock markets are characterised by asymmetric information. If investors cannot distinguish high-quality from low-quality securities, they will value all securities as average resulting in the well known market for lemons. This decreases the allocative efficiency and social welfare by guiding resources to the least good investment opportunities. How can high-quality listed companies communicate with stock markets to distinguish themselves from low-quality listed companies? Although proponents of mandatory disclosure rules in securities markets will answer this question with far-reaching governmental regulation, it is jumping to conclusions and skipping devices that signal the true quality of the investment opportunities to the stock market. This book analyses the functioning of stock markets, in particular the dissemination of price-sensitive information on these markets. In order to evaluate the legal rules governing the dissemination of information from an economic perspective, an operational framework is needed to assess the current disclosure regulation with respect to allocative efficiency. The book replaces vague legal goals of securities regulation, such as investors' protection, by financial economic concepts, such as market efficiency and market liquidity. To enhance allocative efficiency, the book analyses the relevancy of mandatory disclosure rules, the use of trading halts in disseminating information during the opening hours of a stock exchange, the use of selective disclosure and the regulation of insider trading.

Introduction to the Economics of Financial Markets

James Bradfield
Introduction to the Economics of Financial Markets Book PDF

Author : James Bradfield
Publisher : Oxford University Press
Page : 512 pages
File Size : 45,9 Mb
Release : 2007-02-08
Category : Business & Economics
ISBN : 0198042442

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Introduction to the Economics of Financial Markets by James Bradfield Pdf

There are many textbooks for business students that provide a systematic, introductory development of the economics of financial markets. However, there are as yet no introductory textbooks aimed at more easily daunted undergraduate liberal arts students. Introduction to the Economics of Financial Markets fills this gap by providing an extremely accessible introductory exposition of how economists analyze both how, and how well, financial markets organize the intertemporal allocation of scarce resources. The central theme is that the function of a system of financial markets is to enable consumers, investors, and managers of firms to effect mutually beneficial intertemporal exchanges. James Bradfield uses the standard concept of economic efficiency (Pareto Optimality) to assess the efficacy of the financial markets. He presents an intuitive, and introductory, understanding of the primary theoretical and empirical models that economists use to analyze financial markets, and then uses these models to discuss implications for public policy. Students who use this text will acquire an understanding of the economics of financial markets that will enable them to read, with some sophistication, articles in the public press about financial markets and about public policy toward those markets. The book is addressed to undergraduate students in the liberal arts, but will also be useful for undergraduate and beginning graduate students in programs of business administration who want an understanding of how economists assess financial markets against the criteria of allocative and informational efficiency.