Search

We experimentally study how individuals read strategically-transmitted information when they have preferences over what they will learn. Subjects play disclosure games in which Receivers should interpret messages skeptically. We vary whether the state that Senders communicate about is ego-relevant or neutral for Receivers, and whether skeptical beliefs are aligned or not with what Receivers prefer believing. Skepticism is lower when skeptical beliefs are self-threatening than in neutral settings. When skeptical beliefs are self-serving, skepticism is not enhanced compared to neutral settings. These results demonstrate that individuals' exercise of skepticism depends on the conclusions of skeptical inferences.

A large literature has developed on the distinction between hard and soft information with much of this literature focused on displacement of soft information with hard information. We investigate whether the propensity of loan officers at local branches to incorporate soft information in the credit scoring process is affected by the geographical distance between the branch and the bank’s headquarters. We find that hardening soft information is significantly sensitive to branch-to-headquarters distance. We also find that organizational distance affects time for loan approval, increasing approval time for applicants receiving a good credit score (i.e. low probability of default) originated at distant branches and reducing approval time for applicants with poor credit scores (i.e. high probability of default). Finally, we find that on average organizational distance has no direct impact on the likelihood of the occurrence of negative credit events. However, the final rating being equal, the hardening of soft information has an influence on loan performance that varies with organizational distance. Overall, our findings are consistent with the presence of spatially based communication frictions within banking organizations.

This paper examines whether there is a difference in the value of voluntarily assured financial statements of private firms, depending on the availability of other information for the users of the statements. By using a within-firm estimator that completely controls for firm fixed effects, we find that the loan interest rate for private firms with voluntarily assured financial statements is lower when the firms have longer relationships with their banks. This finding suggests that the value of assured financial statements differs among the same type of users (banks), and is larger for those that accumulate soft information through long-term lending relationships. We also find that this larger value is not present when the tenure of the auditor with the client is very long.

International audience; In an environment with privately informed agents who can produce evidence, we study implementation of a social choice function by reading mechanisms: mechanisms that simply apply the social choice function to a consistent interpretation of the evidence. We provide sufficient conditions on the social choice function and the evidence structure for ex post implementability by such mechanisms. If the first-best policy of a mechanism designer satisfies this condition, then its implementation by a reading mechanism does not require commitment. We show that with rich evidence structures, (1) a function that is implementable with transfers is also implementable with evidence but no transfer, (2) under private value, the efficient allocation is implementable with budget balanced and individually rational transfers, and (3) in single-object auction and bilateral trade environments with interdependent values, the efficient allocation is implementable with budget balanced and individually rational transfers.

Resumen En este trabajo se analizan los principales criterios que consideran las entidades financieras a la hora de otorgar un crédito a una Mipyme, al objeto de minimizar su riesgo de impago. Para ello, se desarrolla un estudio empírico realizado a 73 analistas de riesgos de entidades financieras peruanas. Los criterios utilizados por las entidades financieras se clasifican en: personalidad y experiencia del empresario; características del producto o servicio que ofrece la empresa y del mercado donde desarrolla su actividad; estrategia y organización de la empresa; y criterios relacionados con la información contable que presentan las empresas. Los resultados muestran que los criterios que los analistas de riesgos consideran más relevantes a la hora de otorgar un crédito son: el conocimiento del sector que tiene el empresario, la honestidad e integridad del empresario, la cartera de clientes con la que cuenta la empresa, y calificación del personal de la empresa. En cuanto a los criterios relacionados con la información contable, los analistas de riesgos valoran especialmente losratios de liquidez y de endeudamiento, que las empresas lleven algún sistema de costos fiable y que no aparezcan en registros de impagos como el INFOCORP. Este trabajo es especialmente útil a las entidades financieras para ayudarles a mejorar sus sistemas de calificación y a las Mipymes para favorecer una mejor relación con las entidades financieras.AbstractIn this paper we analyze the main criteria that financial institutions consider when granting credit to a MSME, in order to minimize their risk of default. For this purpose, an empirical study was carried out on 73 risk analysts from Peruvian financial institutions. The criteria used by financial institutions are classified into: personality and experience of the entrepreneur; characteristics of the product or service offered by the company and the market where it operates; strategy and organization of the company; and criteria related to the accounting information presented by companies. The results show that the most relevant criteria considered by the risk analysts when granting a credit are: knowledge of the sector that has the entrepreneur, honesty and integrity of the entrepreneur, the client portfolio with which the company has, and qualification of the personnel of the company. Regarding the criteria related to accounting information, risk analysts especially value the liquidity and debt ratios, that companies carry some reliable cost system and that they do not appear in defaults such as INFOCORP. This work is especially useful to financial institutions to help them improve their rating systems, and to MSMEs to foster a better relationship with financial institutions.

Riassunto Utilizzando un dataset proprietario di linee di credito erogate a piccole-medie imprese (PMI) tra il 2012 e il 2014, l’obiettivo del paper è capire come l’informazione di tipo hard e soft possa influenzare la correttezza e la probabilità di errore nelle decisioni di affidamento assunte da un campione di banche di credito cooperativo (BCC). I due tipi di informazione hanno un ruolo complementare nell’influenzare la decisione di prestito finale della banca. L’informazione di tipo quantitativo appare più consistente nel condizionare la correttezza delle decisioni di prestito cosi come quella di evitare gli errori di valutazione. Al contrario, l’informazione di tipo relazionale produce risultati diversi nel tempo e nello spazio. Proprio per questa ragione forme di finanziamento basate sul relationship lending, a seconda del contesto, possono generare decisioni di finanziamento sia corrette sia errate. Abstract Using a proprietary database of lending decisions for small and medium-sized enterprises (SMEs), the aim of the paper is to understand how hard and soft information affect the correctness as well as the probability of errors within the loan decisions for a sample of cooperative banks (CBs). The two types of information play a complementary role in defining the bank loan final decision. Hard information appear more consistent in conditioning the correctness of loans decisions as well as to avoid errors. On the contrary, the relationship lending information generates different results over time and across space. In this sense, according to different scenarios, a lending relationship-based technology may generate both correct and wrong loan’s decisions.

Bankbranschen förändras i takt med digitaliseringen vilket leder till förändringar i både kundernas beteende, bankernas produkter och tjänster samt rådgivarnas arbetssätt. Kunderna besöker inte banken lika ofta och den personliga kontakten med banken minskar. För att behålla en nära relation med företagskunden krävs det därmed att rådgivarna i större utsträckning tar initiativ till att kontakta kunden. Syftet med denna studie är att närmare undersöka och förklara helhetsbilden kring proaktivitet i bank genom att skapa djupare förståelse kring vad som initierar proaktivt agerande samt vad proaktivt agerande leder till. Vår teoretiska modell har prövats i empirin med hjälp av en kvalitativ metod med fallstudier på tre olika banker. Semistrukturerade intervjuer genomförs med totalt sju respondenter, varav sex stycken arbetar med rådgivning till företagskunder. Studien bidrar med en ny tolkning kring det proaktiva arbetssättet som vi inte funnit andra forskare beskriva. Främst finns det tidigare forskning kring vad ett reaktivt eller proaktivt arbetssätt leder till. Vår studie bidrar med tolkningen att arbetet sker i olika grader av aktivitet och att konkurrens, lönsamhet, kunskap, risk, tid, förberedelse, effektivitet och mängd av administrativt arbete avgör i vilken grad rådgivaren agerar aktivt. Vi har funnit att graden av aktivitet bidrar i olika utsträckning till en ökning av kundnöjdhet, kundnytta och bankens nytta samt att grunden i det proaktiva arbetet är informationsflödet

Credit lines have been widely adopted by banks to grant credit to small and medium-sized enterprises (SMEs). However, there often exists a gap between the credit lines granted by banks and the actual funding needs of SMEs. In addition, existing credit line models treat each SME as a stand-alone entity instead of considering it within its supply chain system. But an SME&rsquo, s supply chain relations have a significant impact on its credit-worthiness. To offer banks a holistic assessment, this paper first constructs a base credit line model for SMEs by considering their supply chain background. Next, by accounting for the unique advantage of soft information processing in a supply chain context, we put forward an extended credit line model for supply chain enterprises with soft information. The base and extended credit line models proposed in this paper aim to reduce information asymmetry between banks and SMEs via the core enterprise in the supply chain, thereby helping banks to secure a sustainable source of profit at a lower risk level and SMEs to obtain more credit to support their sustainable growth. A case study is furnished to illustrate how the proposed models can be applied in practice and an empirical analysis further verifies their validity.

Revisionsberättelsen är alltid aktuell för såväl företag som intressenter. Inte minst nu. Dagens revisionsberättelse står inför en förändring för att generera mer väsentlig information och minska förväntansgap mellan företag och intressenter. I dagsläget har IAASB och EU inte enats om en gemensam förändring. Utöver dessa två förändringar önskas även hård respektive mjuk information. Syftet med studien är att utforska och jämföra revisorers, revisorsassistenters och studenters uppfattning om väsentlig information i revisionsberättelsen. Genom detta är förhoppningen att få fram vilken information som önskas i revisionsberättelsen och därmed se vilken av förändringarna som får störst genomslagskraft. Med hjälp av teorier som har sin grund i bland annat legitimitetsteori och professionsteori presenteras en undersökningsmodell. Modellen testas med hjälp av enkäter som skickas ut till studenter, revisorsassistenter och revisorer. Beroende på vilken syn respondenterna har på revisorns roll väntas olika information önskas i revisionsberättelsen. Resultatet visar att om man ser revisorn som försäkran föredrar respondenterna IAASBs krav tillsammans med hård och mjuk information. Ser man revisorns roll som förbättring önskas EUs krav på förändring. Ser respondenterna revisorn som försäkring önskas hård och mjuk information i revisionsberättelsen. Slutsatsen är att vilken information som önskas i revisionsberättelsen skiljer sig åt beroende på hur respondenterna ser revisorns roll. Ytterligare en slutsats är att vilken information respondenterna önskar i revisionsberättelsen skiljer sig åt beroende på om de är revisorer, revisorsassistenter eller studenter. Vår studie bidrar till förståelse för förändringen samt vilken förändring som önskas av de tre aktörerna., The audit report is of importance for both companies and stakeholders. The audit report is undergoing change to present more essential information and to reduce the expectation gap between the company and its stakeholders. Today, IAASB and EU have no agreement regarding a common standard of the audit report. There is also a wish to include hard and soft information. The purpose of this study is to explore and compare students, auditor assistants and auditors view on essential information in the audit report. The goal is to present which information to be included in the audit report and thereby understand which proposal that is the best. An investigation model is presented based on Legitimacy and Profession theory. The model is tested with support from surveys answered by students, auditor assistants and auditors. The results show that respondents who see the auditor as an assurance prefer IAASBs change together with hard and soft information. Respondents who see the auditor as an improvement prefer EUs change. Lastly, respondents who see the auditor as an insurance they want hard and soft information. The conclusion is that which information wanted in the audit report differ dependent on how the respondents see the role of the auditor. The study also shows that which information the respondents wishes in the audit report depends on if the respondent is a student, an auditor assistant or an auditor. Our study contributes to the understanding of the change and what change that is whished by the three actors.

This thesis investigates the effect of banking competition on the cost and the quality of lending to firms by financial institutions. Specifically, the empirical analyzes conducted in this thesis aim to reach two complementary objectives. First, assessing the degree to which the rivalry between banks influences their pricing strategy and therefore the cost of corporate financing. The second objective of this thesis is to study the impacts of bank competition on the way banks generate private information about their customers. To this end we proceed in two steps. First, we investigate whether banking competition affects the type of information used by loan officers to assess borrower’s quality. Then, we check the involvement of bank competition in the termination of bank-firm relationships. We consider for all the analyzes conducted in this thesis an approach where the complementarity between different competition indicators used in the literature is exploited in order to better understand the level of rivalry among banks. Several results emerge from the multiple empirical analyzes conducted in this thesis. First, these show that the market power of financial institutions result from two separate sources: the weight of the bank in the local credit market structure, and the level of efficiency of the credit institution. Therefore, the impact of competition between banks depends on the ability of banking competition to influence the local market structure of credit or the efficiency of bank. Moreover, we show that within a concentrated banking market, the existence of strong rivalries between banks reduced the financing cost of firms that had a house bank. Finally, we demonstrate that banking competition increases the duration of bank-firm relationships and encourages loan officers to produce more private information about borrowers. However, it would be safe for banks to monitor the behavior of loan officers regarding their role on information production, in order to design incentives that ensure a sustained effort on their part., La présente thèse analyse l’incidence de la concurrence bancaire sur le coût et la qualité du crédit produit par les établissements de crédit. Plus précisément, les investigations empiriques menées dans le cadre de ce travail visent deux objectifs complémentaires. Tout d’abord, évaluer dans quelle mesure le degré de rivalité entre les banques influence la stratégie de tarification des banques et par conséquent le coût de financement des entreprises. Le second objectif de cette thèse consiste à étudier l’impact de la concurrence bancaire sur la manière dont les banques produisent de l’information privée sur leurs clients. Pour cela, nous procédons en deux étapes. En premier lieu, nous examinons l’influence du degré de rivalité entre les banques sur la nature des informations utilisées par les chargés d’affaires dans l’évaluation de la qualité des emprunteurs. En second lieu, nous vérifions l’implication de la concurrence bancaire dans la rupture des relations de long terme. Nous adoptons pour toutes les analyses conduites dans cette thèse une démarche permettant d’exploiter la complémentarité entre différents indicateurs de concurrence utilisés dans la littérature afin d’appréhender au mieux le niveau de rivalité entre les banques. Plusieurs résultats se dégagent des multiples analyses empiriques menées dans le cadre de ce travail. Premièrement, il ressort de nos investigations empiriques que le pouvoir de marché des institutions financières découle de deux sources distinctes: le poids de la banque dans la structure du marché local du crédit et le degré d’efficience de l’établissement de crédit. Par conséquent, l’incidence de la concurrence bancaire dépend de sa capacité à influencer la structure du marché local du crédit ou bien l’efficience des banques. De plus, nous montrons qu’au sein d’un marché bancaire concentré, l’existence de fortes rivalités entre les banques réduit le coût de financement des entreprises si ces dernières disposent d’une relation bancaire principale. Enfin, nous démontrons que la concurrence bancaire accroît la longévité des relations de clientèle et encourage les chargés d’affaires à produire plus d’informations privées sur les emprunteurs. Toutefois, il serait prudent au niveau des banques de suivre l’évolution des comportements des gestionnaires de relations bancaires en matière de production d’informations afin d’adapter les mesures incitatives à mettre en place pour garantir la pérennité de leurs comportements.

We study a model of adverse selection, hard and soft information, and mentalizing ability--the human capacity to represent others' intentions, knowledge, and beliefs. By allowing for a continuous range of different information types, as well as for different means of acquiring information, we develop a model that captures how principals differentially obtain information on agents. We show that principals that combine conventional data collection techniques with mentalizing benefit from a synergistic effect that impacts both the amount of information that is accessed and the overall cost of that information. This strategy affects the properties of the optimal contract, which grows closer to the first best. This research provides insights into the implications of mentalizing for agency theory.

This paper investigates SME financing in Italy. The literature distinguishes between two main different lending technologies (LTs) for SMEs: transactional and relationship LTs. We find that banks lend to SMEs by using both LTs together, independently of the size and proximity of borrowers. Moreover, we show that the use of soft information decreases the probability of firms being credit rationed. Finally, we find that more soft information is produced when the bank uses relationship LT as primary technology individually or coupled with transactional LT. Our results support the view that LTs can be complementary, but reject the hypothesis that substitutability among LTs is somehow possible for outsiders by means of hardening of soft information.

This article asks when communication with certifiable information leads to complete information revelation. We consider Bayesian games augmented by a pre-play communication phase in which announcements are made publicly. We first characterize the augmented games in which there exists a fully revealing sequential equilibrium with extremal beliefs (i.e., any deviation is attributed to a single type of the deviator). Next, we define a class of games for which existence of a fully revealing equilibrium is equivalent to a richness property of the evidence structure. This characterization enables us to provide different sets of sufficient conditions for full information disclosure that encompass and extend all known results in the literature, and are easily applicable. We use these conditions to obtain new insights in games with strategic complementarities, voting with deliberation, and persuasion games with multidimensional types.

The Basel II committee set up directives encouraging banks to use internal scores in order to assess the risk of their customers. This new form of information competes with the existing ones. SMEs are most concerned by these new stakes, due to the lack of transparency. The aim of this paper is to understand the determinants of the choice between substitution and complementarity between the two types of information: “soft” and “hard”, to test a potential effect of this choice on the banking performance and to describe which variables are involved in the decision-making process. The originality of this work is to try to quantify the information costs and to use it as a variable which is affecting the adopted choice.

2007/2008 Intermediari creditizi ed agenzie di credit rating svolgono un ruolo decisivo nell’attenuare gli effetti distorsivi della distribuzione asimmetrica delle informazioni cui sono intrinsecamente soggette le transazioni che si pongono in essere tra datori e prenditori di fondi, i quali soli hanno piena conoscenza del proprio, effettivo, merito di credito. In particolare, nel mercato creditizio, le banche, interponendosi tra soggetti in surplus e soggetti in deficit, si sostituiscono agli investitori nel selezionare le alternative di finanziamento, svolgendo per essi il processo di raccolta, di analisi, e di elaborazione delle informazioni relative alla capacità di credito delle possibili controparti, favorendo in ultimo la riduzione dei costi di transazione e di gestione delle informazioni. Analogamente, nel mercato obbligazionario, ove unità in surplus ed unità in deficit si interfacciano in modo diretto, le agenzie di rating si interpongono tra investitori ed emittenti di strumenti di debito, assumendo tuttavia il differente ruolo di “brokers informativi”, ovvero di operatori specializzati nella raccolta e nell’elaborazione delle informazioni circa lo standing creditizio dell’emittente, e nella successiva sintesi e divulgazione delle stesse attraverso un giudizio espresso da un simbolo alfabetico, il credit rating, in grado di comunicare in modo semplice ed immediato agli investitori l’opinione dell’agenzia circa l’idoneità dell’emittente di provvedere in modo esatto e puntuale sia al rimborso del capitale, sia al pagamento degli interessi relativi ad una o più emissioni di debito. Invero, a nostro avviso, è ragionevole ritenere che la reale portata del ruolo assolto da intermediari creditizi ed agenzie di rating nel contrastare le asimmetrie informative tra datori e prenditori di fondi, e l’effettiva efficacia del loro intervento nel promuovere l’efficienza del mercato creditizio ed obbligazionario possano dipendere dalla natura delle informazioni che tali soggetti scelgono di porre a fondamento delle valutazioni relative al merito di credito dei potenziali soggetti finanziati. A tal riguardo è possibile operare una distinzione, seppur non strettamente dicotomica, tra elementi informativi di natura “hard”- i quali tipicamente si presentano in forma quantitativa, e prestandosi a facile codificazione, consentono di essere raccolti in modo impersonale ed interpretati in modo oggettivo ed univoco - ed informazioni di tipo “soft” - che, al contrario, presentandosi in forma prettamente qualitativa/descrittiva ed essendo subordinate ad interpretazione soggettiva da parte del valutatore, sono connotate da un’intrinseca difficoltà di codificazione, e impongono modalità di acquisizione di tipo personale e diretto. Alla luce dei descritti aspetti di differenziazione, il prevalente ricorso ad informazioni di natura hard, se da un lato determina significativi vantaggi in termini di costo di acquisizione ed elaborazione dell’informazione stessa, dall’altro comporta l’inevitabile perdita del patrimonio informativo che solo input di tipo soft sono in grado di veicolare. In tale quadro si inserisce il presente lavoro, finalizzato ad analizzare la variegata morfologia dell’informazione e ad esaminare nello specifico in quale forma (hard o soft) predominante si presentino le informazioni poste alla base dei processi di analisi del merito di credito svolti da intermediari creditizi e agenzie di rating. Ciò equivale ad indagare come tali soggetti scelgano di posizionarsi rispetto al trade-off esistente tra i costi connessi al trattamento dell’informazione - i quali risultano minimizzati in funzione di un crescente utilizzo di hard information - ed il grado di completezza dell’informazione stessa - che si accresce in funzione dell’inclusione di soft information nella base informativa a disposizione del valutatore - dal quale, come anticipato, riteniamo possa dipendere l’efficace riduzione delle asimmetrie informative esistenti tra datori e prenditori di fondi. A tale proposito si osserva come l’utilizzo più o meno intenso di informazioni di natura soft rispetto ad informazioni di carattere hard nell’ambito dei procedimenti valutativi condotti rispettivamente dalle banche e dalle agenzie di rating sia legato al contesto in cui tali processi di analisi sono originati. In particolare, con riferimento alle istituzioni bancarie, è possibile istituire un raffronto tra analisi del merito creditizio condotte nell’ambito di approcci al credito basati alternativamente sulla relazione (relationship lending) o sulla transazione (transactional lending), mentre, per quanto concerne le agenzie di rating, si individua una distinzione tra valutazioni svolte nell’ambito del processo di attribuzione del rating alternativamente sollecitato (solicited) o non sollecitato (unsolicited). La relazione che si instaura tra il soggetto valutatore e l’impresa oggetto di analisi nell’ambito del relationship lending - nel caso della banca - o nell’ambito del processo di attribuzione del rating sollecitato - nel caso dell’agenzia di rating - determina infatti un significativo arricchimento del set di input informativi disponibili per la valutazione, in quanto, oltre a consentire l’acquisizione di un complesso di elementi che, pur essendo codificabili e prestandosi ad interpretazione oggettiva (e, dunque, pur presentando carattere hard), non risultano desumibili da fonti pubbliche per questioni di riservatezza o di opacità informativa dell’impresa, permette di raccogliere una serie di informazioni impossibili da acquisire in forma impersonale alla luce della loro natura prettamente soft, che le rende non codificabili e misurabili esclusivamente attraverso il giudizio e la percezione individuale del medesimo soggetto preposto alla raccolta delle stesse. In ciò risiede, a nostro avviso, il valore aggiunto del contributo offerto da intermediari creditizi ed agenzie di rating alla riduzione delle asimmetrie informative tra datori e prenditori di fondi: anche prescindendo dalle condizioni di maggiore o minore trasparenza della controparte oggetto di analisi, l’inclusione della soft information alla base delle valutazioni condotte da tali soggetti - che risulta preclusa nel contesto tanto del rapporto di finanziamento transaction-based posto in essere dalla banca, quanto dell’attribuzione di un giudizio di rating non sollecitato da parte dell’agenzia - costituisce la determinante ultima dell’effettiva efficacia del loro intervento nel promuovere l’efficienza del mercato. Alla luce di tali considerazioni, la trattazione viene completata attraverso l’esame dell’impianto di analisi e valutazione delle informazioni qualitative sviluppato ed implementato presso un’agenzia di rating italiana, al fine di comprendere con quali strumenti, nel concreto, una credit rating agency possa affrontare il problema dell’elaborazione di informazioni soft - che si presenta con massima intensità nell’ambito del processo di assegnazione del rating di tipo solicited - pervenendo ad un bilanciamento ottimale del trade-off tra il costo di trattamento dell’informazione ed il grado di completezza della stessa. XXI Ciclo 1979

Strategic use of environmental information may have as consequence that a benevolent environmental agency will choose not to disclose information leading to reduced moral motivation. Thus, decision makers will not have access to such information, implying that they will not be able to adjust their decisions to available information on the state of the environment. In contrast, if the benevolent environmental agency instead bases its regulation on standard economic instruments, these instruments will incorporate all available information.

Since information asymmetries have been identified as an important source of bank profits, it may seem that the establishment of information sharing arrangements such as credit registers and bureaus will lead to lower investment in acquiring information. However, banks base their decisions on both hard and soft information, and it is only the former type of data that can be communicated credibly. We show that hard and soft information are strategic substitutes, and that when hard information is shared, banks will invest more in soft information. This can potentially lead to more accurate lending decisions and favor small, informationally opaque borrowers. Higher invest- ment in soft technology offers important implications for borrower switching. We test our theory using firm-level data from 24 countries.