Transaction costs, information technologies and the choice of marketplace among farmers in Northern Ghana

Using a transactions costs framework, we examine the impact of information and communication technologies (mobile phones and radios) use on market participation in developing country agricultural markets using a novel transaction-level data set of Ghanaian farmers. Our analysis of the choice of markets by farmers suggests that market information from a broader range of markets may not always induce farmers to sell in more distant markets; instead farmers may use broader market information to enhance their bargaining power in closer markets. Finally, we find weak evidence on the impact of using mobile phones in attracting farm gate buyers.

Information strategies and the theory of the Firm

Information costs play a key role in determining the relative efficiency of alternative organisational structures. The choice of locations at which information is stored in a firm is an important determinant of its information costs. A specific example of information use is modelled in order to explore what factors determine whether information should be stored centrally or locally and if it should be replicated at different sites. This provides insights into why firms are structured hierarchically, with some decisions and tasks being performed centrally and others at different levels of decentralisation. The effects of new information technologies are also discussed. These can radically alter the patterns and levels of information costs within a firm and so can cause substantial changes in organisational structure.

Information content and forecasting ability of sentiment indicators: case of real estate market

We evaluate a number of real estate sentiment indices to ascertain current and forward-looking information content that may be useful for forecasting demand and supply activities. Analyzing the dynamic relationships within a Vector Auto-Regression (VAR) framework and using the quarterly US data over 1988-2010, we test the efficacy of several sentiment measures by comparing them with other coincident economic indicators. Overall, our analysis suggests that the sentiment in real estate convey valuable information that can help predict changes in real estate returns. These findings have important implications for investment decisions, from consumers' as well as institutional investors' perspectives.

Information customization and food choice

In this paper we employ a hypothetical discrete choice experiment (DCE) to examine how much consumers are willing to pay to use technology to customize their food shopping. We conjecture that customized information provision can aid in the composition of a healthier shop. Our results reveal that consumers are prepared to pay relatively more for individual specic information as opposed to generic nutritional information that is typically provided on food labels. In arriving at these results we have examined various model specications including those that make use of ex-post de-brieng questions on attribute nonattendance and attribute ranking information and those that consider the time taken to complete the survey. Our main results are robust to the various model specications we examine

Mandatory and voluntary information disclosure and the effects on financial analysts: evidence from China

Purpose – This paper aims to make a comparison, different from existing literature solely focusing on voluntary earnings forecasts and ex post earnings surprise, between the effects of mandatory earnings surprise warnings and voluntary information disclosure issued by management teams on financial analysts in terms of the number of followings and the accuracy of earnings forecasts. Design/methodology/approach – This paper uses panel data analysis with fixed effects on data collected from Chinese public firms between 2006 and 2010. It uses an exogenous regulation enforcement to minimise the endogeneity problem. Findings – This paper finds that financial analysts are less likely to follow firms which mandatorily issue earnings surprise warnings ex ante than those voluntarily issue earnings forecasts. Moreover, ex post, they issue less accurate and more dispersed forecasts on former firms. The results support Brown et al.’s (2009) finding in the USA and suggest that the earnings surprise warnings affect information asymmetries. Practical implications – This paper justifies the mandatory earnings surprise warnings policy issued by Chinese Securities Regulatory Commission in 2006. Originality/value – Mandatory earnings surprise is a unique practical regulation for publicly listed firms in China. This paper, for the first time, provides empirical evaluation on the effectiveness of a mandatory information disclosure policy in China. Consistent with existing literature on information disclosure by public firms in other countries, this paper finds that, in China, voluntary information disclosure captures more private information than mandatory information disclosure on corporate earnings ability.

Accounting quality, information risk and implied volatility around earnings announcements

We examine the impact of accounting quality, used as a proxy for information risk, on the behavior of equity implied volatility around quarterly earnings announcements. Using US data during 1996–2010, we observe that lower (higher) accounting quality significantly relates to higher (lower) levels of implied volatility (IV) around announcements. Worse accounting quality is further associated with a significant increase in IV before announcements, and is found to relate to a larger resolution in IV after the announcement has taken place. We interpret our findings as indicative of information risk having a significant impact on implied volatility behavior around earnings announcements.

Quantified Interference: Information Theory and Information Flow

The paper investigates which of Shannon’s measures (entropy, conditional entropy, mutual information) is the right one for the task of quantifying information flow in a programming language. We examine earlier relevant contributions from Denning, McLean and Gray and we propose and motivate a specific quantitative definition of information flow. We prove results relating equivalence relations, interference of program variables, independence of random variables and the flow of confidential information. Finally, we show how, in our setting, Shannon’s Perfect Secrecy theorem provides a sufficient condition to determine whether a program leaks confidential information.

Essays on decision sciences: exploring cognition, information processing, and complexity

This thesis provides three original contributions to the field of Decision Sciences. The first contribution explores the field of heuristics and biases. New variations of the Cognitive Reflection Test (CRT--a test to measure "the ability or disposition to resist reporting the response that first comes to mind"), are provided. The original CRT (S. Frederick [2005] Journal of Economic Perspectives, v. 19:4, pp.24-42) has items in which the response is immediate--and erroneous. It is shown that by merely varying the numerical parameters of the problems, large deviations in response are found. Not only the final results are affected by the proposed variations, but so is processing fluency. It seems that numbers' magnitudes serve as a cue to activate system-2 type reasoning. The second contribution explores Managerial Algorithmics Theory (M. Moldoveanu [2009] Strategic Management Journal, v. 30, pp. 737-763); an ambitious research program that states that managers display cognitive choices with a "preference towards solving problems of low computational complexity". An empirical test of this hypothesis is conducted, with results showing that this premise is not supported. A number of problems are designed with the intent of testing the predictions from managerial algorithmics against the predictions of cognitive psychology. The results demonstrate (once again) that framing effects profoundly affect choice, and (an original insight) that managers are unable to distinguish computational complexity problem classes. The third contribution explores a new approach to a computationally complex problem in marketing: the shelf space allocation problem (M-H Yang [2001] European Journal of Operational Research, v. 131, pp.107--118). A new representation for a genetic algorithm is developed, and computational experiments demonstrate its feasibility as a practical solution method. These studies lie at the interface of psychology and economics (with bounded rationality and the heuristics and biases programme), psychology, strategy, and computational complexity, and heuristics for computationally hard problems in management science.

The macroeconomics of price adjustments under information frictions and menu costs

Esta tese se dedica ao estudo de modelos de fixação de preços e suas implicações macroeconômicas. Nos primeiros dois capítulos analiso modelos em que as decisões das firmas sobre seus preços praticados levam em conta custos de menu e de informação. No Capítulo 1 eu estimo tais modelos empregando estatísticas de variações de preços dos Estados Unidos, e concluo que: os custos de informação são significativamente maiores que os custos de menu; os dados claramente favorecem o modelo em que informações sobre condições agregadas são custosas enquanto que as idiossincráticas têm custo zero. No Capítulo 2 investigo as consequências de choques monetários e anúncios de desinflação usando os modelos previamente estimados. Mostro que o grau de não-neutralidade monetária é maior no modelo em que parte da informação é grátis. O Capítulo 3 é um artigo em conjunto com Carlos Carvalho (PUC-Rio) e Antonella Tutino (Federal Reserve Bank of Dallas). No artigo examinamos um modelo de fixação de preços em que firmas estão sujeitas a uma restrição de fluxo de informação do tipo Shannon. Calibramos o modelo e estudamos funções impulso-resposta a choques idiossincráticos e agregados. Mostramos que as firmas vão preferir processar informações agregadas e idiossincráticas conjuntamente ao invés de investigá-las separadamente. Este tipo de processamento gera ajustes de preços mais frequentes, diminuindo a persistência de efeitos reais causados por choques monetários.

Information asymmetry and competition in credit markets: the pricing of overdraft loans in Brazil

This paper evaluates how information asymmetry affects the strength of competition in credit markets. A theory is presented in which adverse selection softens competition by decreasing the incentives creditors have for competing in the interest rate dimension. In equilibirum, although creditors compete, the outcome is similar to collusion. Three empirical implications arise. First, interest rate should respond asymmetrically to changes in the cost of funds: increases in cost of funds should, on average, have a larger effect on interest rates than decreases. Second, aggressiveness in pricing should be associated with a worseing in the bank level default rates. Third, bank level default rates should be endogenous. We then verify the validity of these three empirical implications using Brazilian data on consumer overdraft loans. The results in this paper rationalize seemingly abnormallly high interest rates in unsecured loans.

Neighborhood information exchange and voter participation : an experimental study

We study the effect of social embeddedness on voter turnout by investigating the role of information about other voters’ decisions. We do so in a participation game, where some voters (‘receivers’) are told about some other voters’ (‘senders’) turnout decision at a first stage of the game. Cases are distinguished where the voters support the same or different candidates or where they are uncertain about each other’s preferences. Our experimental results show that such information matters. Participation is much higher when information is exchanged than when it is not. Senders strategically try to use their first mover position and some receivers respond to this.

Information learning and the stability of fiat money

We analyze the stability of monetary regimes in a decentralized economy where fiat money is endogenously created, information about its value is imperfect, and agents only learn from their personal trading experiences. We show that in poorly informed economies, monetary stability depends heavily on the government's commitment to the long run value of money, whereas in economies where agents gather information more easily, monetary stability can be an endogenous outcome. We generate a dynamics on the acceptability of fiat money that resembles historical accounts of the rise and eventual colIapse of overissued paper money. Moreover, our results provide an explanation of the fact that, despite its obvious advantages, the widespread use of fiat money is a very recent development.

Information asymmetry and transaction costs in a cross-cultural business transaction

The intent of this paper is to provide a practitioners insight into the present and foreseeable future of problem of transaction cost economics related to culture and business etiquette that may increase the of complexity of business communication. We will also explore whether it impacts participant's mindsets regarding opportunistic or passive aggressive behavior. We will study the role of culture, ethics, information asymmetry, and legal systems regarding their importance towards the business contracts and lack of knowledge in local environments. We will make connections to contract theory strategies and objectives and recommend business practices. Furthermore, economic theory explores the role of the impossibility of the perfect contract. Historical and present day operational factors are examined for the determination of forward-looking contract law indications worldwide. This paper is intended provide a practitioners view with a global perspective of a multinational, mid-sized and small corporations giving consideration in a non-partisan and non-nationalistic view, yet examines the individual characteristics of the operational necessities and obligations of any corporation. The study will be general, yet cite specific articles to each argument and give adequate consideration to the intricacies of the global asymmetry of information. This paper defends that corporations of any kind and size should be aware of the risk of international business etiquette and cultural barriers that might jeopardize the savings you could obtain from engaging international suppliers.