Zur Reform des Rating-(Un)Wesens

2010 ◽  
Vol 61 (1) ◽  
Author(s):  
Hanno Beck ◽  
Helmut Wienert
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Empirical Evidence ◽  
Economies Of Scale ◽  
Conflicts Of Interest ◽  
Principal Agent ◽  
Double Blind ◽  
Rating Agencies ◽  
Market Inefficiencies ◽  
Set Up

SummaryThe market for ratings suffers from several inefficiencies: asymmetric information and moral hazard lead to conflicts of interest and principal-agent-problems. Moreover, network externalities and economies of scale lead to a lack of competition in the market for ratings. There is empirical evidence for market inefficiencies as ratingshopping, herding or slow adjustment of wrong ratings to a changed environment. As a remedy for these problems, we suggest a fund where rating-orders are pooled and rated by means of a double-blind-approach. Each issuer of a security gives his product into a pool and rating agencies which meet the standards of the pool are free to tender for the mandate to rate the product. Several aspects how to set up such a pool and possible problems are being addressed in this paper.

Agency, Information, and the Structure of Moral Problems in Business

2006 ◽  
Vol 28 (2) ◽  
pp. 177-195 ◽  
Author(s):  
Bryan W. Husted
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Information Economics ◽  
Principal Agent ◽  
Ethical Problems ◽  
Agent Model ◽  
Moral Problems ◽  
Principal Agent Model

Many ethical problems in business can be characterized as having elements of incomplete and/or asymmetric information. This paper analyzes such problems using information economics and the principal-agent model. It defines the nature of moral problems in business and then applies principal-agent models involving adverse selection and moral hazard to these problems. Possible solutions to conditions of information asymmetry are examined in order to support the development of organizational virtue.

scholarly journals The Problem of Unilateralism in Agency Theory: Towards a Bilateral Formulation

2017 ◽  
Vol 27 (2) ◽  
pp. 163-182 ◽  
Author(s):  
Sareh Pouryousefi ◽  
Jeff Frooman
Keyword(s):  
Social Interaction ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Agency Theory ◽  
Adverse Selection ◽  
Principal Agent ◽  
Ethical Behaviour ◽  
Cautionary Tale ◽  
Economic Interactions ◽  
Normative Argument

ABSTRACT:Some business ethicists view agency theory as a cautionary tale—a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but itsunilateralfocus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for abilateralcautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue that the norm of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our bilateral cautionary-tale formulation extends the normative boundaries of agency theory, while leaving the fundamental economic assumptions of agency theory intact.

scholarly journals A Student of Year 12 in Harrow International School Hong Kong

2018 ◽  
Vol 4 (3) ◽  
pp. 260
Author(s):  
Nanqi Zhou
Keyword(s):  
Hong Kong ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Financial Market ◽  
International School ◽  
Principal Agent ◽  
Principal Agent Problem ◽  
The Government

<p class="BodyA">George Akerlof introduced the idea that due to asymmetric information between the buyer and the seller in the lemons market, the market for second-hand vehicles will eventually go on the wane. Parallel to this argument, this essay discusses the extent of problem caused by information asymmetry in the financial market, with the most prominent issues being adverse selection, moral hazard and principal agent problem. Yet, with more regulation from the government and the market, some of these problems can be ameliorated, thus reducing the role that asymmetric information plays in the financial market.</p>

scholarly journals A Principal-Agent Explanation for Technology Transfer

1970 ◽  
Vol 6 (2) ◽  
pp. 26-44
Author(s):  
Beryl Zi-Lin Kuo ◽  
Chien-Hsin Lin
Keyword(s):  
Technology Transfer ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Technology Licensing ◽  
Principal Agent ◽  
Informal Governance ◽  
Goal Alignment ◽  
Royalty Payment ◽  
Negatively Associated ◽  
Fixed Fee

Technology licensing and transfer is subject to problems of asymmetric information including moral hazard. This study explores the effects of informal governance, knowledge tacitness, and organizational receptivity on the preference of variable royalty scheme in the context of technology licensing. Drawing on the classic principalagent model, we assume that the variable royalty scheme is a process-based contract where the licensee is the principal and the licensor is the agent. The results show that informal governance facilitating goal alignment is positively associated with the variable royalty scheme (i.e. the process-based contract). Organizational receptivity promotes the legitimacy to imposing routines, evaluating the technology, and forming expectation, and is positively associated with the variable royalty scheme. Knowledge tacitness is negatively associated with the variable royalty payment, which implies less transfer programmability moves payment from variable royalties to a fixed fee. Our arguments are significantly different from classic principal-agent relationship that does not involve the dimension of licensee transfer and monitoring capacity

AGENCY PROBLEM DALAM PENERAPAN PEMBIAYAAN AKAD MUDHARABAH PADA PERBANKAN SYARIAH

ALQALAM ◽  
2016 ◽  
Vol 33 (1) ◽  
pp. 46
Author(s):  
Aswadi Lubis
Keyword(s):  
High Risk ◽  
Asymmetric Information ◽  
Human Resources ◽  
Moral Hazard ◽  
Adverse Selection ◽  
Agency Problem ◽  
Agency Problems ◽  
Islamic Banking ◽  
The Public

The purpose of writing this article is to describe the agency problems that arise in the application of the financing with mudharabah on Islamic banking. In this article the author describes the use of the theory of financing, asymetri information, agency problems inside of financing. The conclusion of this article is that the financing is asymmetric information problems will arise, both adverse selection and moral hazard. The high risk of prospective managers (mudharib) for their moral hazard and lack of readiness of human resources in Islamic banking is among the factors that make the composition of the distribution of funds to the public more in the form of financing. The limitations that can be done to optimize this financing is among other things; owners of capital supervision (monitoring) and the customers themselves place restrictions on its actions (bonding).

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