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Since Akerlof (1970), economists have understood the adverse selection problem that information asymmetries can create in used goods markets. The remarkable growth in online used goods auctions thus poses a puzzle. Part of the solution is that sellers voluntarily disclose their private information on the auction web page. This defines a precise contract -- to deliver the car shown for the closing price -- which helps protect the buyer from adverse selection. I test this theory using data from eBay Motors, finding that online disclosures are important price determinants, and that disclosure costs impact both the level of disclosure and prices. (JEL D44, D82, L81)

In directed graphs, relationships are asymmetric and these asymmetries contain essential structural information about the graph. Directed relationships lead to a new type of clustering that is not feasible in undirected graphs. We propose a spectral co-clustering algorithm called di-sim for asymmetry discovery and directional clustering. A Stochastic co-Blockmodel is introduced to show favorable properties of di-sim To account for the sparse and highly heterogeneous nature of directed networks, di-sim uses the regularized graph Laplacian and projects the rows of the eigenvector matrix onto the sphere. A nodewise asymmetry score and di-sim are used to analyze the clustering asymmetries in the networks of Enron emails, political blogs, and the Caenorhabditiselegans chemical connectome. In each example, a subset of nodes have clustering asymmetries; these nodes send edges to one cluster, but receive edges from another cluster. Such nodes yield insightful information (e.g., communication bottlenecks) about directed networks, but are missed if the analysis ignores edge direction.

This paper studies the institutional design of the coordination of macroeconomic stabilization policies within a monetary union in the framework of linear quadratic differential games. A central role in the analysis plays the partitioned game approach of the endogenous coalition formation literature. The specific policy recommendations in the EMU context depend on the particular characteristics of the shocks and the economic structure. In the case of a common shock, fiscal coordination or full policy coordination is desirable. When asymmetric shocks are considered, fiscal coordination improves the performance but full policy coordination doesn?t produce further gains in policymakers? welfare.

Civil war is usually examined from the perspective of commitment problems. This approach provides considerable insight regarding which civil war agreement provisions reduce the chance of renewed fighting. Yet, additional insight can be gained by examining information asymmetries as a potential cause of civil war recurrence. We argue that significant uncertainty regarding military capabilities may persist after fighting ends and that this uncertainty may lead to the breakdown of peace. However, carefully designed peace agreements can guard against renewed civil war by calling for international monitoring, making the belligerents submit military information to third parties, and providing for verification of this information. Our empirical analysis of 51 civil war settlements between 1945 and 2005 shows that these provisions significantly reduce the risk of new civil war. Encouraging the adoption of these provisions may be a useful policy in the international community's effort to establish peace in civil‐war‐torn societies.

AbstractA large literature demonstrates that conservatives have greater needs for certainty than liberals. This suggests an asymmetry hypothesis: Conservatives are less open to new information that conflicts with their political identity and, in turn, political accountability will be lower on the right than the left. However, recent work suggests that liberals and conservatives are equally prone to politically motivated reasoning (PMR). The present article confronts this puzzle. First, we identify significant limitations of extant studies evaluating the asymmetry hypothesis and deploy two national survey experiments to address them. Second, we provide the first direct test of the key theoretical claim underpinning the asymmetry hypothesis: epistemic needs for certainty promote PMR. We find little evidence for the asymmetry hypothesis. Importantly, however, we also find no evidence that epistemic needs promote PMR. That is, although conservatives report greater needs for certainty than liberals, these needs are not a major source of political bias.

ABSTRACTThis paper investigates the association between the adoption of international accounting standards and foreign investment decisions. Prior research suggests that information asymmetries between local and foreign investors and behavioral biases caused by unfamiliarity of the foreign markets contribute to investors preferring to invest in their home markets. Because one of the goals of the adoption of international accounting standards is to establish a high-quality, internationally familiar set of accounting standards, I predict that foreign investments will increase in countries that adopted International Financial Reporting Standards (IFRS) after the adoption and that this increase is driven by the familiarity of IFRS. I find that foreign equity portfolio investments (FPI) increase in countries that adopt IFRS. More importantly, I find that this relation is driven by foreign investors from countries that also use IFRS. Moreover, the effect of accounting familiarity is more pronounced when investor and investee countries share language, legal origin, culture, and region. I also find that countries with lower corruption and better investor protection experience larger increases in FPI after they adopt IFRS relative to other IFRS users. These findings are consistent with the hypothesis that familiar accounting information drives foreign investment decisions.

The first essay "Informational Asymmetries in Laboratory Asset Markets with State-Dependent Fundamentals" investigates the formation of market prices in a new experimental setting involving multi-period call-auction asset markets. In this paper, we are particularly interested in two informational aspects: (1) the role of traders who are informed about the true state and/or (2) the impact of the provision of Bayesian updates of the assets' state-dependent fundamental values (BFVs) to all traders. We find that markets with asymmetrically informed traders exhibit smaller price deviations from ...

In this article we analyze how the enlargement of a monetary union may affect the design of the common monetary policy when the latter transmits asymmetrically between the member countries. We find that the use of national information about inflation & unemployment in the design of the common monetary policy allows for tackling the heterogeneity induced by this asymmetry. This implies that if enlargement contributes to augmenting the transmission asymmetry of monetary policy in EMU, it will raise the need to take into account information about national economies in the formulation of optimal monetary policies in the monetary union. Furthermore, the choice for a new EU Member State to enter EMU will also depend on the monetary strategy implemented by the European Central Bank &, in particular, whether the latter would take the asymmetries in the transmission of monetary policy actions into account. 4 Figures, 11 References. Adapted from the source document.

Access to information is a hallmark of democracy, and democracy demands an informed citizenry. Knowledge of party positions is necessary for voters so that electoral choices reflect preferences, allowing voters to hold elected officials accountable for policy performance. Whereas most vote choice models assume that parties perfectly transmit positions, citizens in fact obtain political information via the news media, and this news coverage can be biased in terms of salience – which leads to asymmetric information. This study examines how information asymmetries in news coverage of parties influence knowledge about political party positions. It finds that the availability of information in the news media about a party increases knowledge about its position, and that party information in non-quality news reduces the knowledge gap more than information in quality news.

Purpose
– The paper investigates the role of information asymmetries and sensegiving processes of citizens claiming for social services. The purpose of this paper is to highlight the relevance of applicants' agency, since it has been generally neglected in the analysis of social services provision. On the contrary, the paper proposes an alternative view, considering applicants as actors who are able to develop dialectic strategies for claiming specific forms of social assistance.


Design/methodology/approach
– The paper is based on a qualitative research, conducted following an inductive approach. The data have been collected in three different Italian municipalities, where the researcher has been the opportunity to perform a period of observation of the interviews between the social workers of the local social services department and the citizens applying for social assistance.


Findings
– The findings of the research point out that informational asymmetries play an ambivalent role in the definition of applicant's strategies, since they represent an ambivalent and dynamic factor, rather than a mere source of disadvantage for the user. From this viewpoint, the citizens' possibilities to access to social assistance are shaped by both institutional and dialectic factors: on the one hand, access to social assistance relies on specific criteria of eligibility (institutionally defined), but on the other hand the access is the outcome of situated sensegiving processes, performed by both the applicants and the gatekeepers of social services during their encounters.


Research limitations/implications
– The research is based on the analysis of a small number of cases, within a context that is characterized by a high level of organizational and professional discretion in the regulation of the provision of social assistance.


Practical implications
– The findings of the research urge policy maker to re-consider applicants as strategic actors and opens the space for the development of new options of regulation of the delivery of social services.


Social implications
– The paper suggests to consider the applicants for social services as people who, although in a condition of need, are capable to identify specific forms of assistance. From this point of view, informational asymmetries are not be considered as a stigmatic issue, but as a space which calls for further and less superficial investigation.


Originality/value
– The paper challenges some of the most taken-for-granted theoretical assumptions in the analysis of the regulation of the access to social assistance. First, it proposes a dynamic interpretation of the notion of informational asymmetries, considering them as a space for action, rather than a binding factor; second, it emphasizes the relevance of user's agency in the access to welfare services, that is generally neglected since most analyses focus on professional discretion disregarding the hypothesis of the user as a strategic actor.