Investment In Information Acquisition
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Investment In Information Acquisition
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Author : Jean-Pierre Danthine
language : en
Publisher:
Release Date : 1985
Investment In Information Acquisition written by Jean-Pierre Danthine and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1985 with categories.
Intertemporal Information Acquisition And Investment Dynamics
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Author : Christian C. Opp
language : en
Publisher:
Release Date : 2015
Intertemporal Information Acquisition And Investment Dynamics written by Christian C. Opp and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
This paper studies intertemporal information acquisition by agents that are rational Bayesian learners and that dynamically optimize over consumption, investment in capital, and investment in information. The model predicts that investors acquire more information in times when future capital productivity is expected to be high, the cost of capital is low, new technologies are expected to have a persistent impact on productivity, and the scalability of investments is expected to be high. My results shed light on the economic mechanisms behind various dynamic aspects of information production by the financial sector, such as the sources of variation in returns on information acquisition for investment banks or private equity funds.
Information Acquisition And Under Diversification
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Author : Stijn van Nieuwerburgh
language : en
Publisher:
Release Date : 2008
Information Acquisition And Under Diversification written by Stijn van Nieuwerburgh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Portfolio management categories.
If an investor wants to form a portfolio of risky assets and can exert effort to collect information on the future value of these assets before he invests, which assets should he learn about? The best assets to acquire information about are ones the investor expects to hold. But the assets the investor holds depend on the information he observes. We build a framework to solve jointly for investment and information choices, with a variety of preferences and information cost functions. Although the optimal research strategies depend on preferences and costs, the main result is that the investor who can first collect information systematically deviates from holding a diversified portfolio. Information acquisition can rationalize investing in a diversified fund and a concentrated set of assets, an allocation often observed, but usually deemed anomalous.
Information Acquisition And Under Diversification
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Author : Stijn Van Nieuwerburgh
language : en
Publisher:
Release Date : 2010
Information Acquisition And Under Diversification written by Stijn Van Nieuwerburgh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
If an investor wants to form a portfolio of risky assets and can exert effort to collect information on the future value of these assets before he invests, which assets should he learn about? The best assets to acquire information about are ones the investor expects to hold. But the assets the investor holds depend on the information he observes. We build a framework to solve jointly for investment and information choices, with a variety of preferences and information cost functions. Although the optimal research strategies depend on preferences and costs, the main result is that the investor who can first collect information systematically deviates from holding a diversified portfolio. Information acquisition can rationalize investing in a diversified fund and a concentrated set of assets, an allocation often observed, but usually deemed anomalous.
Information System Choice And The Timing Of Information Acquisition
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Author : Mitchell A. Farlee
language : en
Publisher:
Release Date : 2012
Information System Choice And The Timing Of Information Acquisition written by Mitchell A. Farlee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
In the literature, the acquisition of private information is usually common knowledge. In an adverse selection model two control problems are examined: (1) the principal (owner) may contract on the agent's (manager's) choice of the probability of early information obtained before production (Investment S), and (2) the owner may observe when the manager becomes informed (before or after the manager's production choice) making the acquisition of private information common knowledge (Investment I). Control investments eliminating these problems are examined individually and jointly. The manager's production cost information provides no decision-facilitating role as full production is always efficient. Thus, early information provides only control effects. The two investments may sound like substitutes but are, rather, complements. Investment S has no benefit but curing owner ignorance about the timing of information acquisition does. Together, an even greater owner benefit is achieved. The owner will choose {I,S} in the absence of direct investment transaction costs. With transaction costs, the equilibrium investment strategy could be {I,S}, {I} or no investment. The owner's greatest benefit requires the manager has a probability choice alternative of one (1) for early information. However, the manager and productive efficiency are best off with a guarantee of late information. Individual investment may be undesirable even though joint investment is desired, showing the importance of viewing the control investments as a complementary system. For certain parameters the owner chooses Investment I, and induces the lowest probability of early information. This also helps the manager and efficiency compared to inducing any greater probability of early information.
Information Acquisition And Decisions Under Risk And Ambiguity
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Author : Ralf Bergheim
language : en
Publisher:
Release Date : 2014
Information Acquisition And Decisions Under Risk And Ambiguity written by Ralf Bergheim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Investment In Real Assets And Information Acquisition
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Author : Deniz Ozenbas
language : en
Publisher:
Release Date : 2002
Investment In Real Assets And Information Acquisition written by Deniz Ozenbas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with categories.
An agent optimizes over real investment and investment in information acquisition while maximizing a two-period utility that captures his ordinal certainty equivalent (OCE) preferences. Optimal investment is characterized and the impact of risk and time preferences on it is investigated.
Information Technology Investment Decisions Under Asymmetric Information
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Author : Deepak Khazanchi
language : en
Publisher:
Release Date : 2014
Information Technology Investment Decisions Under Asymmetric Information written by Deepak Khazanchi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
In this paper, we propose that information technology (IT) managers make investment decisions about new IT initiatives based on a modified rational expectation model. Unlike traditional rational expectation models, we emphasize the relevance of market uncertainty and its impact on the return of new IT investment. This results in information acquisition decisions by managers that can cause information asymmetry. This information asymmetry is endogenous and so the IT manager can become well informed if and only if it is beneficial to do so. We also capture different levels of IT investment across managers by introducing heterogeneity across managers in terms of different levels of initial capital. Based on a simulation analysis to validate our theoretical model, we find that it is the IT manager with larger initial capital outlay who is particularly interested in acquiring information about their IT investments in order to reduce any asymmetry with competitors. Furthermore, we find that holding other things constant, fewer IT investors are informed when information cost increases and in consequence the difference of investment level between the informed and uninformed investors is more pronounced.
Essays In Info Noise Info Ac
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Author : Yuan Zhou
language : en
Publisher: Open Dissertation Press
Release Date : 2017-01-26
Essays In Info Noise Info Ac written by Yuan Zhou and has been published by Open Dissertation Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-01-26 with Business & Economics categories.
This dissertation, "Essays in Information Noise and Information Acquisition in Communication Games" by Yuan, Zhou, 周圆, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: This thesis consists of three independent studies. The first study works on the effect of confirmatory bias. The second study analyses the effect of ambiguity in the communication. The third study discusses two-sender cheap talk model with endogenous information acquisition. In the first study, it develops formulations to capture the effects of confirmatory bias in two-sender models. In these models, the information obtained by the two senders is conditionally independent and endogenously determined by their investment choices. Based on the investment levels they choose, the senders strategically direct messages to the receiver. This studies main purpose is to explore the effects of confirmatory bias in different models by comparing the differences in senders' investment incentives with and without the existence of confirmatory bias. Rather than having an exclusively negative influence on the players, as commonly believed, the results of this study suggest that it is also possible for confirmatory bias to be beneficial. In the second study, the term \ambiguity" is narrowly defined as the phenomenon whereby a message is changed because of factors that cannot be controlled by the players. The results show that ambiguity has positive effects that can improve the truth-telling probability and utility of both players. These effects are observed when different cost types are applied. The positive effect of ambiguity generates a preference for ambiguity among the players. This strong effect on the improvement of truth-telling holds even when the sender's type is assumed to be uncertain. Overall, the results demonstrate the strong power of ambiguity in communication and that this power is beneficial for both players. This study provides theoretical support for making use of the inevitable ambiguity in communication, which can help people improve their payoffs. In the third study, it examines a two-sender cheap talk model in a one-dimensional setting, in which two experts with either the same or opposite preferences choose their levels of investment in information, and communicate with an uninformed decision maker. The information obtained by the two experts is conditionally independent and affected by the investment levels chosen by the experts. After investing, the experts report favourable information and can cheat at some cost if unfavourable signals are observed. When the senders communicate with the receiver simultaneously, the original expert tends to increase his investment in information acquisition if the second non-strategic expert has the opposite bias, and decrease it if he is biased in the same direction. If the agents play a cheap talk game as described in this paper, the cheating decisions made by two oppositely biased senders are strategically complementary. Their investment levels are also strategically complementary as long as some strict conditions are satisfied. Conversely, when the two senders have the same preference, both their cheating decisions and their investment choices appear to be strategically complementary, with no further restrictions. The findings show that in the cheap talk model with endogenous information acquisition, the relationship between the two senders strategies is dependent on their preference relationship. Subjects: Investments - Psychological aspects
Motivating Information Acquisition Under Delegation
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Author : Spyros Terovitis
language : en
Publisher:
Release Date : 2018
Motivating Information Acquisition Under Delegation written by Spyros Terovitis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
We study a model in which a principal delegates a choice between different actions to an expert. The return from each action is unknown but the expert can invest in acquiring (noisy) information before making her choice. The principal would like the expert to invest in information but this investment is unobservable and only the chosen action and its resulting payoff is contractible. We solve for the optimal contract and show that it induces a contrarian bias. As the main application, we explore a setting where an analyst in a brokerage house issues financial recommendations, and argue that our findings are supported by empirical evidence on the behavior of financial analysts.