Stock Price Manipulation : The Role of Intermediaries

We set out to study stock price manipulation when the manipulator is in the role of an intermediary (broker). We find that in the absence of superior information, the broker can manipulate equilibrium outcomes without losing its credibility with respect to accurate forecasting. The result extends to the case when the broker prefers more investment to come into the market. However, when moderate competition among brokers is introduced, then the investors get a favored outcome. When competition exceeds a certain threshold, neither the brokers nor the investors get their respective favored outcomes. In any case, if the broker bias for more investment dominates competition, the brokers get their favorite outcome at the expense of investors.Stock Price Manipulation, Broker Manipulation, Broker Competition, Broker Bias, Emerging Markets

Are Broker Quotes Too Optimistic? Korean Evidence

We examine the behavior of broker quotes in Korean housing markets by comparing the Kookmin Bank apartment (a condominium in a high- rise residential building) price index, a broker quote based apartment price index, and a repeat sales apartment price index that we built using transaction prices, which have become available since January 2006. Broker quotes may differ from actual prices depending on the housing market conditions. Specifically, we test the hypotheses: (1) price increases shown by the broker quote based apartment price index are greater than those shown by the repeat sales apartment price index in an up market; and (2) the broker quote based price index shows a far less price reduction than the repeat sales price index in a down market. We find that indeed in a down market, the broker quote based price index shows far less price reduction than the repeat sales price index (5.75%-8.07%). However, the broker quote based price index does not distort the prices in an up market, where trading volumes are high. It appears that the price inflation in the broker quotes rises as the transaction volume drops. While broker quotes are substantially higher than transaction prices in a down market, the broker sentiment, which is a qualitative assessment of market conditions, appears to be more in line with transaction prices. We have also documented that the broker quote based index reaches its peak about two months after the peak of the repeat sales based index. Finally, broker quotes are smooth in comparison to transaction prices and they are smoothed more in a down market than an up market. Our results suggest that an optimistic view of broker quotes is problematic only in down markets where trading volumes are limited. The price inflation in broker quotes is a risk to the financial system in a market with only a broker quote based index in that it overstates the collateral values underlying mortgage loans in a down market.Broker quotes; Broker quote based apartment price index; Repeat sales apartment price index; House price cycle; Broker sentiment; Korean housing markets

The Flawed State Of Broker-Dealer Regulation And The Case For An Authentic Federal Fiduciary Standard For Broker-Dealers

THE FLAWED STATE OF BROKER-DEALER REGULATION AND THE CASE FOR AN AUTHENTIC FEDERAL FIDUCIARY STANDARD FOR BROKER-DEALER

Broker Positions in Task-Specific Knowledge Networks

In this paper we empirically investigate various benefits and costs associated with broker characteristics of individuals who operate in the account management system of financial service providers. We narrow our focus to broker positions in two specific task-specific knowledge networks that facilitate account management. We study the effect of broker positions on the contribution of individuals to organizational performance. We measure such a contribution by measuring the perceptions of others concerning a particular individual. We also explore how certain personal costs are associated with these task-specific broker positions. More specifically, we explore how these positions affect role ambiguity and role conflict, as self-perceived by that particular individual. To test the hypothesized effects we collect data for a network consisting of 55 individuals. We conclude with stating that service specification broker positions benefit organizations, but service delivery broker positions are detrimental to an organization and that they also invoke personal costs.social networks;account management;role stress;task-specific broker positions

Listing Contract Length and Time on Market

Miceli (1989) in a search for the optimal time to allow a broker to market property provides a theoretical model which posits that the principal (seller) may use the length of the listing contract to motivate the agent (listing broker) to better align incentives. Expanding slightly on Miceli, this present work predicts that longer time allotted the broker to market residential property will decrease broker effort resulting in lower search intensity and eventually a longer marketing span for property, ceteris paribus. This prediction is borne out across three empirical modeling methodologies commonly used in time on market studies.

Insuring the uninsurable : brokers and incomplete insurance contracts

How do markets spread risk when events are unknown or unknowable and where not anticipated in an insurance contract? While the policyholder can "hold up" the insurer for extra contractual payments, the continuing gains from trade on a single contract are often too small to yield useful coverage. By acting as a repository of the reputations of the parties, we show the brokers provide a coordinating mechanism to leverage the collective hold up power of policyholders. This extends both the degree of implicit and explicit coverage. The role is reflected in the terms of broker engagement, specifically in the ownership by the broker of the renewal rights. Finally, we argue that brokers can be motivated to play this role when they receive commissions that are contingent on insurer profits. This last feature questions a recent, well publicized, attack on broker compensation by New York attorney general, Elliot Spitzer. Klassifikation: G22, G24, L1

Transaction costs and market institutions

This paper examines the effect of transaction costs of search on the institution of grain brokers in Ethiopia. Primary data are used to derive traders' shadow opportunity costs of labor and of capital from IV estimation of net profits. A two-step Tobit model is used in which traders first choose where to trade and then choose whether to use a broker to search on their behalf. The results confirm traders' individual rationality in choosing brokerage, showing high transaction costs are linked to increased broker use while high social capital reduces broker use.Grain Economic aspects. ,Grain Prices Ethiopia. ,Grain Trade East Africa. ,Grain trade. ,

Deployment and performance evaluation of a SNAP-based resource broker on the White Rose grid

Resource brokering is an essential component in building effective Grid systems. The aim of this paper is to evaluate the performance of a SNAP (Service Negotiation and Acquisition Protocol) based resource broker on a large distributed Grid infrastructure, the White Rose Grid. The broker uses a three-phase commit protocol to reserve resources on demand, as the traditional advance reservation facilities cannot cater for such needs due to the prior time that it requires to schedule reservations. Experiments are designed and carried out on the White Rose Grid. The experimental results show that the inclusion of the three-phase commit protocol provides a performance enhancement on a large distributed Grid Infrastructure, in terms of the time taken from submission of user requirements until a job begins execution. The results support those previously obtained through the use of mathematical modelling and simulation. The broker is a viable contender for use in future Grid resource brokering implementations

A Qualitative inquiry into the relationship marketing practice of UK insurance brokers.

Significant changes in the UK insurance broking market in recent years have forced insurance brokers to ask: How can we retain our clients? What is the nature of our relationship with our clients? What are the key components in these relationships? How should we manage such relationships? Existing theories in the relationship marketing domain do not provide an answer to these questions. This research aims to form a framework reflecting the nature of broker-client relationship as a development process with key components influencing the quality of relationship attached to each stage of the process. Hence three research objectives are derived: 1) Form a development stage framework reflecting the nature of broker-client relationship; 2) Identify key components influencing relationship quality in each stages of the relationship; and 3) Discuss the model’s implication towards marketing practice. In this research the author takes an interpretivism-constructivist position, by bracketing the author’s value in the interview process, the interviewer (author) constructs the “reality” jointly with the interviewees (broker account executives). The qualitative approach is adopted so that the nature and meaning of broker-client relationships can be investigated in-depth. An abduction analytical approach is taken, which sits between induction and deduction, closer to an inductive perspective. The following data analysis process is then followed: organize data, immerse into data, generate categories and codes, coding data, generate themes, generate frameworks, and search for deviant cases and alternative understandings. Through the analysis of 5 in-depth qualitative interviews, the author reaches the following conclusions: A relationship typically has four stages: initiating, growing, maintaining and terminating. However, a relationship may not necessarily have all four stages, nor might it follow the same sequence. The key components affecting relationship quality in each stage of a relationship varies. In the initiating stage, the most critical components are trustworthiness, professionalism and communication. In the growing stage, they are trustworthiness, commitment, professionalism and calculative trust. In the maintaining stage, the most critical components are heuristic trust, communication, dependence, satisfaction and interaction and in the terminating stage, they are trustworthiness, professionalism and communication. The cost of maintaining a relationship increases whilst the relationship becomes closer. Customer’s expectation in a “too close” relationship can be excessively high. From the broker’s perspective, a balance must be maintained between both the total costs (the cost to the company plus social costs to the broker himself/herself) and the total benefits (benefit to the company and the broker himself/herself). The “tipping point” for the broker (the sole agent of the broker company) is the moment when such total costs overweigh total benefits. The above conclusion has three managerial implications for UK insurance brokers: 1) A relationship can be lost at any development stage of a relationship hence broker needs to be prepared to cope with such relationship. 2) Different strategy must be adopted for different stages of relationship. 3) Avoid the pitfalls of being “too close” in a relationship to keep relationship marketing efforts cost effective