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The Information In Asset Fire Sales, Sheng Huang, Matthew C. Ringgenberg, Zhe Zhang
The Information In Asset Fire Sales, Sheng Huang, Matthew C. Ringgenberg, Zhe Zhang
Research Collection Lee Kong Chian School Of Business
Asset prices remain depressed for years following mutual fund fire sales, but little is known about the causes of these price drops. We show that asymmetric information generates price pressure during fire sales. We separate trades into expected trades, which assume fund managers scale down their portfolio, and discretionary trades. We find that discretionary trades contain fundamental information, whereas expected trades do not. Moreover, other traders cannot distinguish between discretionary and expected trades. Our findings help explain the magnitude and persistence of fire sale discounts: fund managers choose which assets to sell, and information asymmetries make it difficult for arbitrageurs …
Asymmetric Information Of Product Authenticity On C2c E-Commerce Platforms: How Can Inspection Services Help?, Linqiu Li, Xin Fang, Yun Fong Lim
Asymmetric Information Of Product Authenticity On C2c E-Commerce Platforms: How Can Inspection Services Help?, Linqiu Li, Xin Fang, Yun Fong Lim
Research Collection Lee Kong Chian School Of Business
Problem definition: We consider a customer-to-customer (C2C) platform that provides an inspection service. Uncertain about his product’s authenticity, a seller sells his product through the platform. Before purchasing, a buyer obtains a signal of the product authenticity from the product’s price set by the seller. The platform’s inspection service can detect a counterfeit with a probability. If the product passes the inspection, the platform sends it to the buyer and charges the seller a commission fee. Otherwise, the platform returns it to the seller and charges the seller a penalty fee. Methodology/results: We develop a two-stage game-theoretical model. In the …