I empirically analyze credit market outcomes when competing lenders are differentially informed about the expected return from making a loan. I study the residential mortgage market, where property developers often cooperate with vertically integrated mortgage lenders to offer financing to buyers of new homes. I show that these integrated lenders have superior information about the construction...

This study asks whether investors learn differently from gains versus losses, whether learning is better or worse when people are actively investing in a security or passively observing its payoffs, and whether there are personal characteristics that drive learning performance. Experimental evidence shows that the ability to learn from financial information is worse in the loss domain, especial...

TAbstract T—This paper develops a tractable real options framework to analyze the effects of asymmetric information on firms' investment decisions when firms issue equity to finance investment. We assume that firm insiders exactly know the firms' growth prospects, but outside investors do not know. Our analysis shows that, under equity financing, the corporate insiders can signal their private ...

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In this paper we consider the implications of imperfect monitoring in a stochastic environment for both the agents and the normative organisation in a normative MAS. We introduce a notion of information asymmetry to characterise the agents’ knowledge of the monitoring strategy, and show that there are potential benefits of information asymmetry for the normative organisation in reducing its cos...

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If each member of a group assigns a certain probability to a hypothesis, what probability should the collective as a whole assign? More generally, how should individual probability functions be merged into a single collective one? I investigate this question in case that the individual probability functions are based on different information sets. Under suitable assumptions, I present a simple ...

We propose a definition of egalitarian equivalence that extends Pazner and Schmeidler’s (1978) concept to environments with incomplete information. If every feasible allocation rule can be implemented by an incentive compatible mechanism (as, for instance, in the case of non-exclusive information), then interim egalitarian equivalence and interim incentive efficiency remain compatible, as they ...

The same contestants often meet repeatedly in contests. Behavior in a contest potentially provides information with regard to one’s type and can therefore in‡uence the behavior of the opponents in later contests. This paper shows that if e¤ort is observable, this can induce a ratchet e¤ect in contests: high ability contestants sometimes put in little e¤ort in an early round in order to make the...