57 research outputs found
Auction Design with Advised Bidders
No full textThis paper studies efficient and optimal auction design where bidders do not know their values and solicit advice from informed but biased advisors via a cheap-talk game. When advisors are biased toward overbidding, we characterize efficient equilibria of static auctions and equilibria of the English auction under the NITS condition (Chen, Kartik and Sobel (2008)). In static auctions, advisors transmit a coarsening of their information and a version of the revenue equivalence holds. In contrast, in the English auction, information is transmitted perfectly from types in the bottom of the distribution, and pooling happens only at the top. Under NITS, any equilibrium of the English auction dominates any efficient equilibrium of any static auction in terms of both efficiency and the seller's revenue. The distinguishing feature of the English auction is that information can be transmitted over time and bidders cannot submit bids below the current price of the auction. This results in a higher efficiency due to better information transmission and allows the seller to extract additional profits from the overbidding bias of advisors. When advisors are biased toward underbidding, there is an equilibrium of the Dutch auction that is more efficient than any efficient equilibrium of any static auction, however, it can bring lower expected revenue. Keywords auction design, cheap-talk, full revelation, english auction, communicatio
Timing Decisions in Organizations: Communication and Authority in a Dynamic Environment
No full textWe consider a problem where an uninformed principal makes a timing decision interacting with an informed but biased agent. Because time is irreversible, the direction of the bias crucially affects the agent's ability to credibly communicate information. When the agent favors late decision making, full information revelation often occurs. In this case, centralized decision making, where the principal retains authority and communicates with the agent, implements the optimal decision-making rule. When the agent favors early decision making, communication is partial, and the optimal decision-making rule is not implemented. Delegation adds value when the bias is for early decision making, but not for late decision making
Real Options Signaling Games with Applications to Corporate Finance
No full textWe study games in which the decision to exercise an option is a signal of private information to outsiders, whose beliefs affect the utility of the decision-maker. Signaling incentives distort the timing of exercise, and the direction of distortion depends on whether the decision-maker's utility increases or decreases in outsiders' belief about the payoff from exercise. In the former case, signaling incentives erode the value of the option to wait and speed up option exercise, while in the latter case option exercise is delayed. We demonstrate the model's implications through four corporate finance settings: investment under managerial myopia, venture capital grandstanding, investment under cash flow diversion, and product market competition. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: [email protected]., Oxford University Press.
Strategic and Financial Bidders in Takeover Auctions
No full textUsing data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are mature, poorly performing companies. We also find that (i) valuations of different strategic bidders are more dispersed and (ii) valuations of financial bidders are correlated with aggregate economic conditions. Our results suggest that different targets appeal to different types of bidders, rather than that strategic bidders always value targets more because of synergies
Competition among Sellers in Securities Auctions
No full textWe study simultaneous security-bid second-price auctions with competition among sellers for potential bidders. The sellers compete by designing ordered sets of securities that the bidders can offer as payment for the assets. Upon observing auction designs, potential bidders decide which auctions to enter. We characterize all symmetric equilibria and show that there always exist equilibria in which auctions are in standard securities or their combinations. In large markets the unique equilibrium is auctions in pure cash. We extend the model for competition in reserve prices and show that binding reserve prices never constitute equilibrium as long as equilibrium security designs are not call options. (JEL D44, D82, G10)
Investment busts, reputation, and the temptation to blend in with the crowd
No full textWe provide a real-options model of an industry in which agents time abandonment of their projects in an effort to protect their reputations. Agents delay abandonment attempting to signal quality. When a public common shock forces abandonment of a small fraction of projects irrespective of agents' quality, many agents abandon their projects strategically even if they are unaffected by the shock. Such "blending in with the crowd" effect creates an additional incentive to delay abandonment ahead of the shock, leading to accumulation of "living dead" projects, which further amplifies the shock. The potential for moderate public common shocks often improves agents' values. Keywords: abandonment; real options; signaling; asymmetric information; reputatio
Real options signaling games with applications to corporate finance,
No full textWe study games in which the decision to exercise an option is a signal of private information to outsiders, whose beliefs affect the utility of the decision-maker. Signaling incentives distort the timing of exercise, and the direction of distortion depends on whether the decision-maker's utility increases or decreases in outsiders' belief about the payoff from exercise. In the former case, signaling incentives erode the value of the option to wait and speed up option exercise, while in the latter case option exercise is delayed. We demonstrate the model's implications through four corporate finance settings: investment under managerial myopia, venture capital grandstanding, investment under cash flow diversion, and product market competition. (JEL G31, D82) The real options approach to investment and other corporate finance decisions has become an increasingly important area of research in financial economics. The main underlying concept is that an investment opportunity is valuable not only because of associated cash flows but also because the decision to invest can be postponed. As a result, when making the investment decision, one must take into account both the direct costs of investment and the indirect costs of foregoing the option to invest in the future. The applications of the real options framework have become quite broad. 1 We thank the anonymous referee, Anat Admati, Felipe Aguerrevere, Geert Bekaert, Nina Boyarchenko, Cecilia Bustamante, Nadya Malenko, Ilya Strebulaev, Pietro Veronesi (the editor), Neng Wang, Jeffrey Zwiebel, seminar participants at Stanford University, and participants at the 2010 Western Finance Association Annual Meeting in Victoria, BC; the 2010 UBC Winter Finance Conference; and the 9 th Trans-Atlantic Doctoral Conference at LBS for their helpful comments. Send correspondence to Steven R. Grenadier, Graduate School of Business, Stanford University, 655 Knight Way, Stanford, CA, 94305. E-mail: [email protected]. Andrey Malenko: MIT Sloan School of Management, 100 Main Street, E62-619, Cambridge, MA, 02142. E-mail: [email protected]. 1 The early literature, started b
RUS ZİHNİYETİNİN EPİSTEMOLOJİSİ ÜZERİNE: PUTPEREST ANAERKİLLİĞİN EMPERYAL İDEOLOJİDE YÜCELTİLMESİ MESELESİ
No full textNekita ve Malenko, bu yazıda, dinî anlamda putperest ve Hıristiyanlık, politik anlamda da çoğulcu Novgorod Cumhuriyeti (eski) ve Rusya İmparatorluğu (yeni) dilemmalarından hareketle, Rus zihniyeti üzerine psikanalitik bir inceleme yapmaktadır. Buna göre, Rus zihniyetinin temelinde anaerkil temayüller ve "Ana" ve "Ata" arketipik sembolleri arasındaki denge yer almaktadır. Ancak Eski Rus'un Rusya İmparatorluğuna dönüşmesiyle birlikte, bu epistemolojik ilke, içeriğinden yoksun bırakılarak sadece görünüşü muhafaza edilmiş ve esasında toplum, ataerkil temayüllere teslim olmuştu
Usuzování v deskriptivní logice
No full textTitle: Reasoning in Description Logics Author: Mgr. Jaromír Malenko Department: Department of Theoretical Computer Science and Mathematical Logic, Faculty of Mathematics and Physics, Charles University in Prague Supervisor: Prof. RNDr. Petr Štěpánek, DrSc.; Department of Theoretical Computer Science and Mathematical Logic, Faculty of Mathematics and Physics, Charles University in Prague Keywords: Description logic, Reasoner, Cartesian product, Non-monotonic reasoning Abstract: We deal with several aspects of reasoning in Description Logics. First, since description logic (DL) is a subset of First Order Logic (FOL), we use a FOL reasoner to reason in DL. We implemented dl2fol, a DL reasoner that takes an ontology (a DL theory with rules), translates it into a FOL theory, passes this set of formulae to an underling FOL reasoner, and interprets the result in terms of given ontology. This is an effective method for reasoning with newly introduced language constructors. However, we observed longer running times and that satisfiability of some DL concepts wasn't proved due to FOL undecidability. Second, we extend two DLs by introducing new language construct: cartesian product (CP) of concepts and roles. This allows for expressing relationships, that are not expressible by other means in weaker DLs. We...Název: Usuzování v deskriptivní logice Autor: Mgr. Jaromír Malenko Pracoviště: Katedra teoretické informatiky a matematické logiky, Matematicko-fyzikální fakulta, Univerzita Karlova v Praze Školitel: Prof. RNDr. Petr Štěpánek, DrSc.; Katedra teoretické informatiky a matematické logiky, Matematicko-fyzikální fakulta, Univerzita Karlova v Praze Klíčová slova: Deskriptivní logika, dokazovač, kartézský součin, nemonotónní usuzování Abstrakt: Práce se zabývá následujícími problémy při usuzování v deskriptivní logice. 1. Protože deskriptivní logika (DL) je podmnožinou predikátové logiky (PL), ukážeme použití dokazovače v PL pro dokazování v DL. Implementovali jsme dokazovač v DL na- zvaný dl2fol, který na vstupu dostane ontologii (teorie DL s pravidly), přeloží ji do teorie PL a získanou množinu formulí předá dokazovači v PL. Odpověď dokazovače se použije pro sestavení odpovědi na dotaz týkající se zadané ontologie. 2. Rozšíříme dvě známé DL tak, že zavedeme nový operátor jazyka: kartézský součin konceptů a rolí. To umožní vyjádřit vztahy, které nejsou ve slabších DL vyjádřitelné. V DL SROIQ ukážeme, jak mohou být axiomy kartézského součinu modelovány za použití jiných jazykových operátorů. Pro DL EL++ s kartézskými axiomy představíme polyno- miální algoritmus pro testování subsumpce konceptů. Dokážeme,...Katedra teoretické informatiky a matematické logikyDepartment of Theoretical Computer Science and Mathematical LogicFaculty of Mathematics and PhysicsMatematicko-fyzikální fakult
Optimal Dynamic Capital Budgeting
No full text© The Author(s) 2018. Published by Oxford University Press on behalf of The Review of Economic Studies Limited. I study optimal design of a dynamic capital allocation process in an organization in which the division manager with empire-building preferences privately observes the arrival and properties of investment projects, and headquarters can audit projects at a cost. Under certain conditions, a budgeting mechanism with threshold separation of financing is optimal. Headquarters: (1) allocate a spending account to the manager and replenish it over time; (2) set a threshold, such that projects below it are financed from the account, while projects above are financed fully by headquarters upon an audit. Further analysis studies when co-financing of projects is optimal and how the size of the account depends on past performance of projects
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