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Why echo chambers are useful
Jann, Ole; Schottmuller, Christoph - 2019
Why do people appear to forgo information by sorting into “echo chambers”? We construct a highly tractable multi-sender, multi-receiver cheap talk game in which players choose with whom to communicate. We show that segregation into small, homogeneous groups can improve everybody’s...
Persistent link: https://www.econbiz.de/10012265620
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Rational Herding in Microloan Markets : Online Appendix
Zhang, Juanjuan - 2012
), "Rational Herding in Microloan Markets," Management Science, Vol. 58, No. 5, May, pp. 892-912.Microloan markets allow individual … borrower listings on Prosper.com, the largest microloan market in the United States. We find evidence of rational herding among … payoff externalities. Moreover, instead of passively mimicking their peers (irrational herding), lenders engage in active …
Persistent link: https://www.econbiz.de/10013114024
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Dynamic equilibrium bunching
Wang, T'ao - 2011
signals. Bunching is different from herding; it occurs in the first period and recursively until herding takes place or the … symmetric mixed strategy equilibrium. When players become patient enough, herding of investment disappears in the most efficient …
Persistent link: https://www.econbiz.de/10009521752
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A Bayesian Understanding of Information Uncertainty and the Cost of Capital
Johnstone, David - 2013
The term "information risk" or "information uncertainty" is defined as the risk of a misleading signal. This risk is understood Bayesianly in terms of the likelihood function f(S|φ). In Bayesian method, f(S|φ) captures the quality of signal S with respect to parameter φ. The Bayesian position...
Persistent link: https://www.econbiz.de/10013085394
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New Product Launch : Herd Seeking or Herd Preventing?
Liu, Ting; Schiraldi, Pasquale - 2013
derive the optimal launch sequence. The decision maker's dynamic equilibrium strategy endogenizes informational herding …
Persistent link: https://www.econbiz.de/10014210148
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Search of Prior Art and Revelation of Information by Patent Applicants
Langinier, Corinne; Marcoul, Philippe - 2010
We examine the strategic non-revelation of information by patent applicants. In a model of a bilateral search of information, we show that patent applicants may conceal information, and that examiners make their screening intensity contingent upon the received information. We then analyze the...
Persistent link: https://www.econbiz.de/10014050107
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Estimation procedure for "price formation in call actions with insider information"
Brünner, Tobias - 2021
This note provides the details of the estimation procedure in Br¨unner (2019). In Section 2 we derive the posterior distribution. Section 3 describes the MCMC algorithm used to obtain draws from the posterior distribution and in Section 4 we present the method for our model check. We conclude...
Persistent link: https://www.econbiz.de/10012507949
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Public Information and Market Skepticism of Voluntary Disclosure
Li, Zining; Lunawat, Radhika - 2021
We examine the impact of public information on firms’ disclosure strategies. We portray two regimes based on a model that extends the setting of Dye (1985) and Jung and Kwon (1988). In the first regime, the firm is able to respond to public information and thus has the last word, and in the...
Persistent link: https://www.econbiz.de/10013215178
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The Role of Information in Building Reputation in an Investment/Trust Game
Lunawat, Radhika - 2012
This article analyzes the role of information in building reputation in an investment/trust game. The model allows for information asymmetry in a finitely repeated sender-receiver game and solves for sequential equilibrium to show that if there are some trustworthy managers who always disclose...
Persistent link: https://www.econbiz.de/10013098371
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Trading Against Disorderly Liquidation of a Large Position Under Asymmetric Information and Market Impact
Hillairet, Caroline - 2016
We consider trading against a hedge fund or large trader that must liquidate a large position in a risky asset if the market price of the asset crosses a certain threshold. Liquidation occurs in a disorderly manner and negatively impacts the market price of the asset. We consider the perspective...
Persistent link: https://www.econbiz.de/10012981705