Private Information Research Papers - Academia.edu (original) (raw)

In this article, I examine the effect of pre-existing relationships between a firm and its potential lender on the potential lender's decision whether or not to extend credit to the firm. I find that a potential... more

In this article, I examine the effect of pre-existing relationships between a firm and its potential lender on the potential lender's decision whether or not to extend credit to the firm. I find that a potential lender is more likely to extend credit to a firm with which it has a pre-existing relationship as a source of financial services, but

We study a contest with multiple, nonidentical prizes. Participants are privately informed about a parameter (ability) affecting their costs of effort. The contestant with the highest effort wins the first prize, the contestant with the... more

We study a contest with multiple, nonidentical prizes. Participants are privately informed about a parameter (ability) affecting their costs of effort. The contestant with the highest effort wins the first prize, the contestant with the second-highest effort wins the second prize, and so on until all the prizes are allocated. The contest's designer maximizes expected effort. When cost functions are linear or concave in effort, it is optimal to allocate the entire prize sum to a single “first” prize. When cost functions are convex, several positive prizes may be optimal. (JEL D44, J31, D72, D82)

Private information obtained by lenders leads to borrower capture to the extent that such information cannot be communicated credibly to outsiders. We analyze how this capture affects the loan portfolio allocation of informed lenders.... more

Private information obtained by lenders leads to borrower capture to the extent that such information cannot be communicated credibly to outsiders. We analyze how this capture affects the loan portfolio allocation of informed lenders. First, we show that banks charge higher interest rates and finance relatively less creditworthy borrowers in market segments with greater information asymmetries. Second, when faced with greater competition from outside lenders, banks reallocate credit toward more captured borrowers (flight to captivity). Third, if borrower quality and captivity are sufficiently correlated, an increase in the competitiveness of uninformed lenders can worsen the informed lender's overall loan portfolio. The model explains observed consequences of financial liberalizations.

We examine how the informational structure of loan markets interacts with banks' strategic behavior in determining lending standards, lending volume, and the aggregate allocation of credit. We show that, as banks obtain private... more

We examine how the informational structure of loan markets interacts with banks' strategic behavior in determining lending standards, lending volume, and the aggregate allocation of credit. We show that, as banks obtain private information about borrowers and information asymmetries across banks decrease, banks may loosen their lending standards, leading to an equilibrium with deteriorated bank portfolios, lower profits, and expanded

This article presents a theoretical approach that may be used to understand the way individuals regulate disclosure of private information. The communication boundary management perspective, while more generally applicable, in this... more

This article presents a theoretical approach that may be used to understand the way individuals regulate disclosure of private information. The communication boundary management perspective, while more generally applicable, in this presentation focuses on the way marital couples manage talking about private matters with each other. This theoretical perspective presents a boundary coordination process representing couples’management of communication boundaries in balancing a need for difclosure with the need for privacy. The theory identifies the prerequisite conditions for disclosure and the message strategies a disclosing spouse may use to tell private information, as well as the strategic messages the marital partner may use to reply. In addition, a proposal for the way the disclosing spouse and receiving partner manage the coordination of their communication boundaries is presented.

We study an auction whose outcome influences the future interaction among agents. The impact of that interaction on agent i is assumed to be a function of all agents' types (which are private information at the time of the auction).... more

We study an auction whose outcome influences the future interaction among agents. The impact of that interaction on agent i is assumed to be a function of all agents' types (which are private information at the time of the auction). Explicit illustrations treat auctions of ...

The Condorcet Jury Theorem pertains to elections in which the agents have common preferences but diverse information. We show that, whenever "sincere" voting leads to the conclusions of the Theorem-decisions superior to those... more

The Condorcet Jury Theorem pertains to elections in which the agents have common preferences but diverse information. We show that, whenever "sincere" voting leads to the conclusions of the Theorem-decisions superior to those that would be made by any individual based on private information, and asymptotically correct decisions as the population becomes large--there are also Nash equilibria with these properties,