scholarly journals The Wisdom of the Crowd When Acquiring Information Is Costly

2021 ◽  
Author(s):  
Jacob Glazer ◽  
Ilan Kremer ◽  
Motty Perry
Keyword(s):  
Optimal Policy ◽  
Information Acquisition ◽  
Business Strategy ◽  
Investment Decision ◽  
Optimal Investment ◽  
Time Varying ◽  
Information Cascade ◽  
Investment Process ◽  
The Cost

We consider a sequential investment process that is characteristic of crowdfunding platforms, among other contexts. Investors wish to avoid the cost of information acquisition and thus prefer to rely on information acquired by previous investors. This may lead to a phenomenon similar to an information cascade. We characterize the optimal policy that balances between the incentive to acquire information and the optimal investment decision. The policy is based on time-varying transparency levels such that it may be worthwhile to conceal some information in some periods. This paper was accepted by Joshua Gans, business strategy.

ANALISA PERBANDINGAN DALAM RANGKA PEMILIHAN BEBERAPA IP UPSTREAM PROVIDER DI PT. INDOSAT

2018 ◽  
Vol 4 (1) ◽  
pp. 57
Author(s):  
Yuli Anwar ◽  
Dahlar .
Keyword(s):  
Business Strategy ◽  
High Speed ◽  
Human Life ◽  
Sustainable Growth ◽  
The Internet ◽  
Network Service Provider ◽  
High Speed Data ◽  
Telecommunications Services ◽  
The Cost ◽  
Internet Network

Abstract. One of the advances in information technology that now has changed the outlook and human life, business process and business strategy of an institution is the internet. The internet is a very large networks that connected to computers and serves throughout the world in one centralized network. With the internet we can access data and information anytime and anywhere.    As one provider of high-speed data communications services and the pioneer of the internet network service provider in Indonesia that provides integrated services, as well as one of the pioneer development of internet services that provide extensive services in the building and apply it throughout Indonesia. Indosat ready to seize opportunities for sustainable growth of business spectrum are still sprawling Indonesia.    Therefore, Indosat continues to focus on the development of increased efforts to provide the best service for customers of Indosat. Indosat will continue to develop and expand network coverage and a larger investment that the company will achieve excellence in the field of integrated telecommunications services.    Ranking by region of the IP Providers can be seen by grouping IP Providers, and management over IP Providers prefer to choose providers based on where it orginates as an example for the region of the U.S if it will be preferred providers that come from U.S. providers.With the commencement of the internet network optimization start early in 2008 with the selection of the appropriate IP Upstream Provider criteria, it is up to date according to data obtained from Indosat, seen any significant changes to the cost of purchasing capacity of the IP Upstream.    Based on the data obtained that until Q3 or September 2008, the number of IP Upstream Providers that previously there were 20 to 10 IP Upstream Provider, IP Transit Price total decrease of 11% to the price of IP Transit Price / Mbps there is a decrease of 78%, while from the capacity bandwith an increase of 301% capacity from 2008.

Understanding Socially Responsible Investing and Its Implications for Islamic Investment Industry

2019 ◽  
Vol 7 (1) ◽  
pp. 1
Author(s):  
Mohd Nizam Barom
Keyword(s):  
Investment Decision ◽  
Socially Responsible Investing ◽  
Clear Understanding ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Developed Economies ◽  
Responsible Investing ◽  
Screening Strategies ◽  
Investment Process ◽  
Islamic Investment

Understanding Socially Responsible Investing and Its Implications for Islamic Investment Industry // // // // // Social, ethical and environmental concerns have been used as important consideration for investment decision by an increasing number of investors. This can be seen by the size and growth of the socially responsible investment (SRI) industry in the developed economies. At the same time, scholars and commentators of Islamic finance have also called for Islamic investment industry to learn from the experience of SRI in incorporating social responsibility issues in the investment process, in line with the ethical principles of Islam and the overall objective of the Shari’ah (Maqasid al-Shari’ah). This would require Islamic investment sector to have a clear understanding of the SRI industry in order to effectively benefit from its experience. This is particularly critical due to the significant diversity of investors and complexity in the issues and strategies adopted in the SRI industry. Hence, this paper adds to the Islamic investment literature by providing an extensive  and systematic survey of SRI industry in terms of its (i) underlying motivations and values; (ii) issues of concerns; (iii) types of investors; and (iv) screening strategies. It then synthesizes these components within the context of the ‘value-based’ investors. This synthesized framework offers a useful tool for Islamic investment practitioners to understand the theoretical and practical aspects of SRI. Subsequently, the paper highlights important implications of the findings for Islamic investment industry in terms of the issues that it needs to consider in emulating SRI practices and a number of lessons that it can learn from the SRI experience.  

scholarly journals Competing Conventions with Costly Information Acquisition

Games ◽  
2021 ◽  
Vol 12 (3) ◽  
pp. 53
Author(s):  
Roberto Rozzi
Keyword(s):  
Information Acquisition ◽  
Evolutionary Model ◽  
Equilibrium Selection ◽  
The Other ◽  
Group Interactions ◽  
Social Coordination ◽  
Long Run ◽  
Stochastic Stability Analysis ◽  
The Stability ◽  
The Cost

We consider an evolutionary model of social coordination in a 2 × 2 game where two groups of players prefer to coordinate on different actions. Players can pay a cost to learn their opponent’s group: if they pay it, they can condition their actions concerning the groups. We assess the stability of outcomes in the long run using stochastic stability analysis. We find that three elements matter for the equilibrium selection: the group size, the strength of preferences, and the information’s cost. If the cost is too high, players never learn the group of their opponents in the long run. If one group is stronger in preferences for its favorite action than the other, or its size is sufficiently large compared to the other group, every player plays that group’s favorite action. If both groups are strong enough in preferences, or if none of the groups’ sizes is large enough, players play their favorite actions and miscoordinate in inter-group interactions. Lower levels of the cost favor coordination. Indeed, when the cost is low, in inside-group interactions, players always coordinate on their favorite action, while in inter-group interactions, they coordinate on the favorite action of the group that is stronger in preferences or large enough.

scholarly journals Empirical Evidence on Time-Varying Hedging Effectiveness of Emissions Allowances under Departures from the Cost-of-Carry Theory

2013 ◽  
Vol 2013 ◽  
pp. 1-8 ◽  
Author(s):  
Kai Chang
Keyword(s):  
Futures Market ◽  
Time Varying ◽  
Conditional Volatility ◽  
Conditional Correlation ◽  
Spot Prices ◽  
Market Participants ◽  
Hedging Effectiveness ◽  
Hedge Ratios ◽  
Cost Of Carry ◽  
The Cost

Under departures from the cost-of-carry theory, traded spot prices and conditional volatility disturbed from futures market have significant impacts on futures price of emissions allowances, and then we propose time-varying hedge ratios and hedging effectiveness estimation using ECM-GARCH model. Our empirical results show that conditional variance, conditional covariance, and their correlation between between spot and futures prices exhibit time-varying trends. Conditional volatility of spot prices, conditional volatility disturbed from futures market, and conditional correlation of market noises implied from spot and futures markets have significant effects on time-varying hedge ratios and hedging effectiveness. In the immature emissions allowances market, market participants optimize portfolio sizes between spot and futures assets using historical market information and then achieve higher risk reduction of assets portfolio revenues; accordingly, we can obtain better hedging effectiveness through time-varying hedge ratios with departures from the cost-of-carry theory.

Cost of capital and asset characteristic value

2021 ◽  
pp. 2150007
Author(s):  
Bill Y. Shen
Keyword(s):  
Stock Price ◽  
Cost Of Capital ◽  
Investment Decision ◽  
Fair Value ◽  
Secondary Market ◽  
Credit Spread ◽  
Structure Model ◽  
Characteristic Value ◽  
Option Theory ◽  
The Cost

We propose a possible alternative to WACC as cost of capital for a business investment decision through option theory. The cost of capital in this new definition becomes forward-looking and easy to compute with traded market information as inputs. More importantly, it is a fair value- based approach and does not depend on investors’ own expectation. An important parameter “asset characteristic value” is identified and its role is further illustrated by using Merton’s capital structure model. Asset characteristic value can be calibrated by using stock price or credit spread observed from a secondary market.

Optimal investment with time-varying transition probabilities for regime switching

2021 ◽  
Vol 29 (2) ◽  
pp. 102-115
Author(s):  
Hyo-Chan Lee ◽  
Seyoung Park ◽  
Jong Mun Yoon
Keyword(s):  
Regime Switching ◽  
Transition Probabilities ◽  
Optimal Investment ◽  
Cash Flows ◽  
Optimal Timing ◽  
Time Varying ◽  
Content Type ◽  
Stochastic Nature ◽  
Optimal Thresholds

Abstract This study aims to generalize the following result of McDonald and Siegel (1986) on optimal investment: it is optimal for an investor to invest when project cash flows exceed a certain threshold. This study presents other results that refine or extend this one by integrating timing flexibility and changes in cash flows with time-varying transition probabilities for regime switching. This study emphasizes that optimal thresholds are either overvalued or undervalued in the absence of time-varying transition probabilities. Accordingly, the stochastic nature of transition probabilities has important implications to the search for optimal timing of investment.

Review of recent developments on improvement of estimated regulatory documentation for road works

2021 ◽  
Vol 2021 (23) ◽  
pp. 31-42
Author(s):  
Anatolii Tsynka ◽  
◽  
Andrii Hrinchuk ◽  
Ivan Rakovych ◽  
◽  
...  
Keyword(s):  
Work Performance ◽  
New Technologies ◽  
Operation Time ◽  
Road Construction ◽  
Labor Costs ◽  
The Road ◽  
Regulatory Documents ◽  
Road Work ◽  
Investment Process ◽  
The Cost

Introduction. In the modern conditions of the pricing system in the construction of Ukraine, the key value have the estimated norms, which are presented in separate collections, the main purpose of which is to determine the standard quantity of resources required to perform a particular type of work as a basis for the transition to the cost indicators. In order to determine the cost of road work objectively and accurately, it is essential that the indicators of estimated norms meet the requirements of regulatory documents and modern methods of execution of road works.Problematics. In connection with the active improvement of the regulatory base of the road construction industry, permanent upgrade of road organizations technique fleet, the introduction of new technologies and materials in construction and operation of roads, improving the methods of work there is a discrepancy between the existing resource element of estimated norms and the actual conditions of work in terms of built-up labor costs, the operation time of machines and mechanisms and the range of materials. Accordingly, it affects the reliability and accuracy of determining the cost of road works.Purpose. Improvement and harmonization with actual working conditions and requirements of regulatory documents of industry regulatory and estimate base of resource elementary estimated norms for work performed during construction, reconstruction, repair and operational maintenance of roads and bridges to ensure reliable and valid technical, economic and estimated calculations.Materials and methods. During work performance the analysis of the regulatory documentation, establishing the requirements to the technology of road works and materials has been carried out. A number of chronometric observations with the measurement of time of road works in full-scale conditions was carried out. The obtained data were summarized, averaged and on their basis the indicators of the resource element of the estimated norms were estimated.Results. A review of the main amendments and additions, which came into force after the approval of Amendment No 2 SOU 42.1-37641918-035:2018 [1] and Amendment No 2 SOU 42.1-37641918-071:2018 [2], which were developed to improve the regulatory-estimate base for the calculation of road works, taking into account the requirements and provisions of existing regulatory documents taking into account the current state of scientific and technological progress in the road sector.Conclusions. The above analysis of the amendments that came into force with the approval of [1]. and [2] will systematize the innovations provided by the requirements of current regulatory documents on the calculation of the cost of road works and the development of relevant documents at all stages of the investment process, planning and organization of road works, as well as the writing-off of material resources. Review and systematization of recent improvements in the estimated regulatory documents for road works will provide an opportunity to optimally plan the use of available material, labor and financial resources, often limited.Keywords: public road, operational maintenance, investment documentation, overhaul and current repairs, machine, mechanism, regulatory document, resource element estimate norm, Standard of Organization of Ukraine.

scholarly journals European Option Based R&D Investment Decision Making under Uncertainties

2015 ◽  
Vol 2015 ◽  
pp. 1-6
Author(s):  
Qing Miao ◽  
Boyang Cao ◽  
Minghui Jiang
Keyword(s):  
Decision Making ◽  
Research And Development ◽  
Joint Venture ◽  
Investment Decision ◽  
Optimal Investment ◽  
European Option ◽  
Project Investment ◽  
Research Joint Venture ◽  
Investment Decision Making ◽  
D Investment

This paper establishes the payoff models of the European option for research and development (R&D) projects with two enterprises in a research joint venture (RJV). The models are used to assess the timing and payoffs of the R&D project investment under quantified uncertainties. After the option game, the two enterprises can make optimal investment decision for the R&D project investment in the RJV.

Relationship-Specificity, Contract Enforceability, and Income Smoothing

2013 ◽  
Vol 88 (5) ◽  
pp. 1629-1656 ◽  
Author(s):  
Yiwei Dou ◽  
Ole-Kristian Hope ◽  
Wayne B. Thomas
Keyword(s):  
Incomplete Contracts ◽  
Optimal Investment ◽  
Income Smoothing ◽  
Additional Risk ◽  
Specific Investment ◽  
Specific Investments ◽  
Contractual Obligations ◽  
The Cost ◽  
The Relationship

ABSTRACT: Contracting parties, such as the firm and its supplier, have cost-reducing incentives to make investments that support the unique transactions between them. However, to the extent that one party may renege on its contractual obligations, the other party incurring the cost of the relationship-specific investment bears additional risk and is less willing to invest such that sub-optimal investment occurs. In countries where enforceability of explicit contracts is particularly weak, parties have incentives to signal their willingness to fulfill implicit claims and maintain long-term relationships. We predict that firms engage in income smoothing to send such a signal to their suppliers. Consistent with these expectations, we find that firms that both reside in countries with weak contract enforceability and operate in industries with a greater need for relationship-specific investments tend to smooth reported income more. We further decompose income smoothing into “informational” and “garbled” components and find that results are driven by the informational component of income smoothing. Our results support the important role that accruals play in providing information in the presence of incomplete contracts. JEL Classifications: F14, K12, L14, M41, M43

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