Relying on the Information of Others: Debt Rescheduling with Multiple Lenders

Can inertia in terminating unsuccessful loans (creditor passivity) be due to the multiplicity of lenders in loan arrangements? Can a lender reschedule, betting against his odds? Private information in the form of bad but coarse news, that would prompt foreclosure on its own, will instead lead to rescheduling. The gamble is that other lenders may have sharper information. At equilibrium, rescheduling occurs even if all lenders received bad news. This is ine¢ cient (increasing the cost of capital) compared to perfect information sharing. However, barren information sharing, at equilibrium there is no excess reliance on the information of others from a social point of view. The paper also contains an extension dealing with \"�financial scandals\".Debt contracts, asymmetric information, rescheduling, in- solvency, Bayesian games.

Relying on the Information of Others: Debt Rescheduling with Multiple Lenders

Can inertia in terminating unsuccessful loans be due to the multiplicity of lenders in loan arrangements? Can a lender reschedule, betting against his odds? We show that fear of being last in a liquidation run prevents the aggregation of the lenders' information about the value of continuation. Private information in the form of bad but coarse news, that would prompt foreclosure on its own, will instead lead to rescheduling. The gamble is that other lenders may have sharper information. At equilibrium, rescheduling occurs even if all lenders received bad news. This is inefficient (increasing the cost of capital) compared to perfect information sharing. However, from a social point of view, barren information sharing, the equilibrium does not exhibit excessive reliance on the information of others.Debt contracts, asymmetric information, rescheduling, bankruptcy, Bayesian games

Incentives to (irreversible) investments under different regulatory regimes

This paper addresses the issue of how regulatory constraints affect firm's investment choices when the firm has the option to delay investment. The "RPI-x" rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. It is shown that these rules are identical in their impact on investment choices, in that the change in the option value exactly compensates the change in the ``direct'' profitability of investment. The result is then analysed in the light of option theory and explained on the basis of the ``bad news principle''.

Incentives to (Irreversible) Investments Under Different Regulatory Regimes

This paper addresses the issue of how regulatory constraints affect firm's investment choices when the firm has the option to delay investment. The RPI-x rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. It is shown that these rules are identical in their impact on investment choices, in that the change in the option value exactly compensates the change in the “direct“ profitability of investment. The result is then analysed in the light of option theory and explained on the basis of the “bad news principle“.

Does Bad News Spread Faster?

Bad news travels fast. Although this concept may be intuitively accepted, there has been little evidence to confirm that the propagation of bad news differs from that of good news. In this paper, we examine the effect of user perspective on his or her sharing of a controversial news story. Social media not only offers insight into human behavior but has also developed as a source of news. In this paper, we define the spreading of news by tracking selected tweets in Twitter as they are shared over time to create models of user sharing behavior. Many news events can be viewed as positive or negative. In this paper, we compare and contrast tweets about these news events among general users, while monitoring the tweet frequency for each event over time to ensure that news events are comparable with respect to user interest. In addition, we track the tweets of a controversial event between two different groups of users (i.e., those who view the event as positive and those who view it as negative). As a result, we are able to make assessments based on a single event from two different perspectives

An agent-based model about the effects of fake news on a norovirus outbreak

Concern about health misinformation is longstanding, especially on the Internet. Using agent-based models, we considered the effects of such misinformation on a norovirus outbreak, and some methods for countering the possible impacts of ‘good’ and ‘bad’ health advice. The work explicitly models spread of physical disease and information (both online and offline) as two separate but interacting processes. The models have multiple stochastic elements; repeat model runs were made to identify parameter values that most consistently produced the desired target baseline scenario. Next, parameters were found that most consistently led to a scenario when outbreak severity was clearly made worse by circulating poor quality disease prevention advice. Strategies to counter ‘fake’ health news were tested. A 10% reduction in circulating bad advice or making at least 20% of people fully resistant to believing in and sharing bad health advice were effective thresholds to counteract the negative impacts of bad advice during a norovirus outbreak. How feasible it is to achieve these targets within communication networks (online and offline) should be explored

Sharing bad news of a lung cancer diagnosis: understanding through communication privacy management theory.

BACKGROUND: The aim of this paper is to understand the process of information disclosure and privacy as patients share their news of lung cancer with significant others. METHODS: Twenty patients with lung cancer and 17 family members/friends accompanying them at diagnosis-giving completed either individual or dyad semi-structured interviews. Initial thematic analysis, then Petronio's Communication Privacy Management theory was used to inform interpretation. RESULTS: Patients described a sense of ownership of the news of their cancer and sought control of how, when and with whom it was shared. Family members expressed a need to follow the patients' rules in sharing this news, which limited their own support systems. Patients and family members had to live within the relational communication boundaries in order to maintain their trusting relationship and avoid potential disruptions. CONCLUSION: Patients as individuals are strongly interlinked with significant others, which impacts on their experience of disclosing private information. This shapes their psychological processes and outcomes impacting on their illness experience. This should be considered when developing interventions to support patients with sharing bad news. Copyright © 2015 John Wiley & Sons, Ltd.This project was funded by Dimbleby Cancer Care Research FundThis is the author accepted manuscript. The final version is available from Wiley via http://dx.doi.org/10.1002/pon.402

Voluntary Disclosure and Risk Sharing

This paper analyzes the disclosure strategy of firms that face uncertainty regarding the investor's response to a voluntary disclosure of the firm's private information.This paper distinguishes itself from the existing disclosure literature in that firms do not use voluntary disclosures to separate themselves from the less profitable firms.Here, voluntary disclosures are used to redistribute risk.It is shown that in a partial disclosure equilibrium, a firm discloses relatively bad news and withholds relatively good news.The reason for nondisclosure is that a firm is not willing to risk a negative response by the investor.However, if private information is relatively bad, nondisclosure imposes such a high risk on the investor, that he invests most of his capital in investment opportunities other than the firm.In that case, the firm is better off by disclosing its private information as this reduces the risk of the investor and increases the expected investment in the firm.risk sharing;voluntary disclosure

Exploring Supervisor Responses to Employees Who Share Bad News: Why and Under What Conditions are Messengers Shot?

abstract: Employees are directly involved in work tasks and processes which are necessary to accomplish unit or organizational goals, and accordingly, they may become aware of key mistakes, slips, and failures that are unbeknownst to the leader or supervisor responsible for the work unit or organization. Given that errors or deviations in work tasks or processes can have far-reaching effects within the organization, it may be essential for employees to share bad news with their leader or supervisor so that steps can be taken to address the issue or ameliorate negative consequences. However, although employees' sharing of bad news may be important to the organization and should be encouraged, supervisors may respond to the messenger in ways that discourage the behavior. Unfortunately, we lack an explanation of why and under what conditions supervisors respond positively or negatively to employees who share bad news. Thus, the purpose of this dissertation is to address this gap in our understanding. I draw from social exchange theory and the transactional theory of stress to develop a conceptual model of sharing bad news. I suggest that sharing bad news can be cast as a transaction between employees and supervisors that is mediated by supervisors’ appraisals of employees’ sharing the message. The quality of the relationship between an employee and supervisor, or leader-member exchange (LMX), is strengthened when supervisors appraise the sharing of bad news as challenging, or potentially rewarding; however, LMX is weakened when supervisors appraise the sharing of bad news as hindering, or potential harmful. In turn, LMX influences supervisor responses to the sharing of bad news in the form of evaluations of the employee’s effectiveness. In addition to these main effects, I also consider how aspects of the message delivery, such as the timeliness with which messages are conveyed and extent to which employees incorporate solutions when they share bad news, can influence supervisor appraisals of sharing bad news. Finally, I suggest that the extent to which the messenger is responsible for the bad news moderates the relationships between appraisals of sharing bad news and LMX. I test this model in three studies.Dissertation/ThesisDoctoral Dissertation Business Administration 201

Incentives to (Irreversible) Investments Under Different Regulatory Regimes

This paper addresses the issue of how regulatory constraints affect firm's investment choices when the firm has the option to delay investment. The RPI-x rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. It is shown that these rules are identical in their impact on investment choices, in that the change in the option value exactly compensates the change in the direct profitability of investment. The result is then analysed in the light of option theory and explained on the basis of the bad news principle