Loss aversion has been used to explain why a high equity premium might be consistent with plausible levels of risk aversion. The intuition is that the different utility impact of wealth gains and losses leads loss-averse investors to behave similarly to investors with high risk aversion. But if so, should these agents not perceive larger gains from international diversification than standard ex...

Operational risk incidences are likely to increase the degree of information asymmetry between firms and investors. We analyze operational risk disclosures by US financial firms during 1995–2009 and their impact on different measures of information asymmetry in the firms’ equity markets. Effective spreads and the price impact of trades are shown to increase around the first announcements of suc...

aim and background: the behavioral inhibition system (bis) and the behavioral activation system (bas) are considered as factors to verify the effects of personality significance on cortical activity. the present study explored the effects of the bis and bas on frontal asymmetry in response to affect stimuli. methods and materials: this study included 36 individuals (18 with high bas sensitivity...

If investors are more averse to the risk of losses on the downside than of gains on the upside, investors ought to demand greater compensation for holding stocks with greater downside risk. Downside correlations better capture the asymmetric nature of risk than downside betas, since conditional betas exhibit little asymmetry across falling and rising markets. We find that stocks with high downs...

so far, the financial experts could not calculate independent earnings to have a necessary quality. in this case, they can reach a range of earnings, which show a more correct form of quality of earnings, of course with performing the suitable equitabilities. therefore, the concept of quality of earnings is not a fixed defining. however, it is a relative concept that depends to its relation to ...

In the model a ...scal stabilisation is announced under asymmetry of information between the government and the private investors. The government could be of two types: a dry type and a wet type, according to the amount of spending cuts it decides to make. Private investors may thus lack con...dence in the stabilisation program and interest rates would be too high, re‡ecting this lack of credib...

Explaining how entrepreneurs overcome information asymmetry between themselves and potential investors to obtain financing is an important issue for entrepreneurship research. Our premise is that economic explanations for venture finance, which do not consider how social ties influence this process, are undersocialized and incomplete. However, we also argue that organization theoretic arguments...

We show that investor recognition and bonding associated with cross-listing on a U.S. exchange are distinct effects using a sample of Canadian firms . In contrast to the post-listing decline documented in the literature, we find that cross-listed firms with a single class of shares enjoy a permanent increase in valuation if they attract and maintain investor recognition over time. Valuations of...

The passage of the Jumpstart Our Business Startups Act (JOBS Act) ushered in a new wave of equity crowdfunding in the United States. Title II of the JOBS Act aims to make it easier for new ventures to raise funds from accredited investors. The number of Title II crowdfunded projects is growing rapidly. Based on data for U.S. online 506(c) offerings across 17 leading platforms, more than $1.27 b...

The strong growth in collateralized debt obligation transactions raises the question how these transactions are designed. The originator designs the transaction so as to maximize her benefit subject to requirements imposed by investors and rating agencies. An important issue in these transactions is the information asymmetry between the originator and the investors. First Loss Positions are the...