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Glode, Vincent; Green, Richard C.; Lowery, Richard - 2010 - Rev.

We show that firms intermediating trade have incentives to overinvest in financial expertise, and that these investments can be destabilizing. Financial expertise in our model improves firms' ability to accurately estimate value when trading a security. It creates adverse selection, which under...

Persistent link: https://www.econbiz.de/10003955258

Mixed signals : investment distortions with adverse selection

Darst, R. Matthew; Refayet, Ehraz - 2019

We study how adverse selection distorts equilibrium investment allocations in a Walrasian credit market with two …-sided heterogeneity. Representative investor and partial equilibrium economies are special cases where investment allocations are … trade and investment allocations below perfect information levels. The degree of heterogeneity between informed agents' type …

Persistent link: https://www.econbiz.de/10012181247

The role of funding portals as signaling offering quality in investment crowdfunding

Andrés, Pablo de; Correia, Ricardo; Rezola, Álvaro; … - In: Finance research letters 46 (2022) 1, pp. 1-5

Persistent link: https://www.econbiz.de/10013341421

Screening experts' distributional preferences

Erharter, Dominik - 2013

We study optimal direct mechanisms for a credence goods expert who can be altruistic or spiteful. The expert has private information about her distributional preferences and possibly also about her customer's needs. We introduce a method that allows the customer to offer separate contracts to...

Persistent link: https://www.econbiz.de/10010193284

Economics of voluntary information sharing

Liberti, José; Sturgess, Jason; Sutherland, Andrew - 2018

We show that lenders join a U.S. commercial credit bureau when information asymmetries between incumbents and entrants create an adverse selection problem that hinders market entry. Lenders also delay joining when information asymmetries protect them from competition in existing markets,...

Persistent link: https://www.econbiz.de/10011960063