The Signaling Effect of Critics -- Evidence from a Market for Experience Goods

Two competing theories of initial engagement audit pricing are examined empirically. DeAngelo's (1981a) model predicts initial engagement discounts in all settings, while Dye's (1991) model specifically predicts discounting will not occur in settings where audit fees are publicly disclosed. Unlike the United States and most countries, audit fees are publicly disclosed in Australia. Our study examines initial engagement pricing in Australia during a time period when comparable U.S. studies report discounts of 25 percent (Ettredge and Greenberg 1990; Simon and Francis 1988). The Australian evidence finds initial engagement discounting only for upgrades from non-Big 8 to Big 8 auditors. Discounting for upgrades to Big 8 auditors is consistent with economic theories of discount pricing by sellers of higher-priced, higher-quality experience goods as an inducement to purchase when uncertainty about product quality is resolved through buying (experiencing) the goods. The evidence in our study is generally consistent with Dye's (1991) conclusion that public disclosure of audit fees precludes initial engagement discounting and the potential independence problems arising from such discounting.

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Is Establishing a New Partnership Useful Information for Investors in the Smartphone Supply Market?

Sustainability ◽

10.3390/su13105573 ◽

2021 ◽

Vol 13 (10) ◽

pp. 5573

Author(s):

Insung Son ◽

Sihyun Kim

Keyword(s):

South Korea ◽

Stock Price ◽

Individual Investors ◽

Trading Patterns ◽

Market Impacts ◽

The Us ◽

Signaling Effect ◽

Parts Suppliers ◽

Country Specific

This study analyzed partner volatility (new, old, revocation partners) and country-specific signal effects (United States (US), Taiwan, Japan, and South Korea) for Apple iPhone parts suppliers from 2007 to 2018. Mid- to long-term stock price movements were also analyzed to define trading patterns by investor type. The results using logit regression analysis revealed that new partners and revocation partners each have a signaling effect perceived as positive and negative information in the short term, and the excess returns by country showed a positive signaling effect in the order of the US, Taiwan, South Korea, and Japan. The findings also suggest that the change in the new partners’ stock price after the preannouncement of new products was useful investment information. Moreover, information asymmetry was found between individual investors, institutions, and foreigners. Results indicate that new partner selection in the smartphone market impacts corporate value and serves as useful investment information.

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On the signaling effect of reward-based crowdfunding: (When) do later stage venture capitalists rely more on the crowd than their peers?

Research Policy ◽

10.1016/j.respol.2021.104267 ◽

2021 ◽

Vol 50 (6) ◽

pp. 104267

Author(s):

Paolo Roma ◽

Maria Vasi ◽

Christos Kolympiris

Keyword(s):

Venture Capitalists ◽

Signaling Effect

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Demobilised or dormant? Exploring pro-strike attitudes among employees who have never joined a strike

Economic and Industrial Democracy ◽

10.1177/0143831x20980059 ◽

2020 ◽

pp. 0143831X2098005

Author(s):

Lorenzo Frangi ◽

Muhammad Umar Boodoo ◽

Robert Hebdon

Keyword(s):

Collective Bargaining ◽

Union Membership ◽

Economic Conditions ◽

Experience Goods ◽

Political Values ◽

Financial Situation ◽

General Decline ◽

Potential Impact ◽

Over Time

The general decline of strikes does not necessarily imply that workers are demobilised. A dormant strike potential can be present. Drawing on strikes as ‘experience goods’, this article sheds light on this point by studying pro-strike attitudes among employees in 24 countries who have never been on strike. The variation in pro-strike attitudes is explained by both contextual (collective bargaining coverage, economic conditions and freedom of rights and liberties) and individual (union membership and confidence in unions, political values and household financial situation) factors. Deeper analyses of three countries highlight the potential impact of specific repertoires of contention developed over time on the formation of pro-strike attitudes. Implications for the labour conflict literature and union strategies are discussed.

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Where Lies the Signaling Effect of the SRP? Announcement vs. Execution

Atlantic Economic Journal ◽

10.1007/s11293-008-9157-3 ◽

2008 ◽

Vol 37 (1) ◽

pp. 115-116

Author(s):

Gili Yen ◽

Eva C. Yen

Keyword(s):

Signaling Effect

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