Asymmetric information and overinvestment in quality
نویسندگان
چکیده
منابع مشابه
Asymmetric information and overinvestment in quality
In a standard adverse selection world, asymmetric information about product quality leads to quality deterioration in the market. Suppose that a higher investment level makes the realization of high quality more likely. Then, if consumers observe the investment (but not the realization of product quality) before purchase, they can infer the probability distribution of high and low quality that ...
متن کاملCompetitive Price and Quality under Asymmetric Information
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your perso...
متن کاملEBITDA and Overinvestment in Capital
EBITDA is a commonly used performance measure for (1) valuation, (2) debt contracting, and (3) executive compensation. The widespread use of EBITDA by stakeholders may induce managers to focus EBITDA as well. Since EBITDA excludes various expenses, managers who focus on EBITDA may underweight those costs when investing in capital and choosing leverage levels. I proxy for managers’ focus on EBIT...
متن کاملInvestment in quality under asymmetric information with endogenously informed consumers
When sellers are privately informed about quality, signaling models can successfully explain an equilibrium correlation between prices and exogenous quality but do not account for incentives to invest in quality improvement. This paper shows that sellers may be motivated to invest in quality if consumers, though initially uninformed, may acquire costly information before buying. The equilibrium...
متن کاملThe Effect of Asymmetric Information in the Money Market on Investment, Employment, and Production in Iran
Nowadays, banks are considered as one of the major components of the financial system of a country and any deficits and malfunction in the banking system will negatively affect the performance of the real sector. Therefore, there is a need for more investigation on the behavior of banks and factors affecting those behaviors in a country. One of the issues that affect the behavior of banks is sy...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: European Economic Review
سال: 2014
ISSN: 0014-2921
DOI: 10.1016/j.euroecorev.2013.12.005