Browsing by Subject "Information asymmetry"

Now showing 1 - 3 of 3

Disintermediation and co-opetition in platform ecosystems and modern value chains
(2015-05) Li, Zhuoxin; Agarwal, Ashish (Ph. D. in business administration); Gilbert, Stephen M.; Barua, Anitesh; Duan, Jun (Jason); Lai, Guoming; Whinston, Andrew B.
This dissertation investigates partial disintermediation and co-opetition in platform-based ecosystems and modern supply chains. Disintermediation has been an intriguing puzzle for managers for the last several decades, but recent development in electronic commerce makes the management of this trade-off even more challenging. The first type of partial disintermediation I study, often referred to as platform envelopment, is widely observed in platform-based businesses. Platform owners often rely on complementary innovations from third-party providers (i.e., third-party contents), while providing their own products/services to consumers (i.e., first-party contents). The second type of partial disintermediation I study is referred to as supplier encroachment. Due to the fast development of electronic commerce, many manufacturers have established their direct-selling channels on the internet (e.g., online stores), instead of completely relying on third-party retailers to reach customers. The widespread observation of disintermediation and the resulting co-opetition behaviors in various industries has motivated me to investigate two important questions: (1) what's the impact of partial disintermediation on consumer demand and firm profits? (2) what strategies can be used to manage the co-opetition relationship? I use both analytical modeling and empirical methods to study the impact of disintermediation on consumer behaviors, firm profits, and social welfare. The findings provide managerial insights into how to manage the co-opetition dilemma due to disintermediation.
Finding good enough coins under symmetric and asymmetric information
(2017-12-08) Pattabiraman, Srilakshmi; Caramanis, Constantine
We study the problem of returning m coins with biases above 0:5. These good enough coins that are returned by the agent should be acceptable to the authority by meeting the authority's Family Wise Error Rate constraint. We design adaptive algorithms that invoke Sequential Probability Ratio Test to find these good enough coins. We consider scenarios that differ in terms of the information available about the underlying Bayesian setting. The symmetry or asymmetry of the underlying setup, i.e., the difference between what the agent and the authority know about the underlying prior and the support, presents different challenges. We also make notes on the algorithms' sample complexity.
How information asymmetry affects contract design : paying for private firms with IOU's
(2016-05) Jansen, Mark; Parrino, Robert, 1957-; Fracassi, Cesare; Almazan, Andres; Hartzell, Jay; Starks, Laura; Abrevaya, Jason
This dissertation examines a financing mechanism that is common in the acquisition of privately-held firms. Using a novel database of transactions in which the target firm is private, this paper shows that sellers receive a debt claim as a contingent payment for the firm that is being sold. The debt claim, which takes the form of seller financing, is secured by the assets of the target firm. I show that proxies for information asymmetry are correlated with the presence of seller financing as payment in the transaction. I also find that when the firm is more likely to have received a financial audit, the transaction is less likely to include seller financing. Since financial audits improve firm transparency, I interpret this as evidence that a reduction in information asymmetries between the parties of a acquisition affect the deal structure. A complementary explanation for the use of seller financing is related to capital constraints faced by buyers in the financing of the transaction. I present evidence that contract structures are affected by cross-sectional and time-series changes in the supply of local investment capital for buyouts. I find that seller financing is less common in areas in which locally informed capital is more abundant. I also find that transactions contain a lower percentage of seller financing in city-years in which Small Business Administration provides loan guarantees for the acquisition and expansion of firm’s loan guarantees are higher. The evidence suggests that seller financing is solving a contracting problem because it is unaffected by controls for local banking activity.