Show simple item record

dc.contributor.authorBiard, Antoine
dc.date.accessioned2010-02-09T15:56:34Z
dc.date.available2010-02-09T15:56:34Z
dc.date.issued2005
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/3370
dc.language.isofren
dc.subjectOvervaluationen
dc.subjectAnalysten
dc.subjectMoral Hazarden
dc.subjectCommon Agencyen
dc.subject.ddc332en
dc.subject.classificationjelC72en
dc.subject.classificationjelD82en
dc.subject.classificationjelG24en
dc.titleRegulation of ''Guru'' Analysts' Conflicts of Interesten
dc.typeCommunication / Conférence
dc.description.abstractenConflicts of interest are the inherent price to pay to benefit from information synergies offered by multiple financial service providers. We focus on conflicts faced by a investment bank's "guru" sell-side analyst, which is torn between the pro-investor research department favoring fair valuation, and the "pro-corporate firms" underwriting department favoring overvaluation. Thanks to a delegated common agency game under moral hazard, we endogenize the influence of environment variables on conflicts outcome as regards market valuation. We demonstrate first that the risk of overvaluation depends crucially on the extent of the relative pricing preferences of opposite financial interests at stake. Thus, the more the potential profit from underwriting activities exceeds potential brokerage commissions, the more the bank favors issuers over investors, and the more likely market overvaluation is. Consequently, to protect naive uninformed investors, we introduce in a second time a regulator in the framework of a simultaneous intrinsic relationship, which su¤ers from overvaluation on the one hand, and is allowed to take costly judicial proceedings to penalize banks on the other hand. We then show that coercive regulation greatly mitigates damaging conflicts outcomes, even if it induces free-riding behaviors among fair-valuation partisans.en
dc.identifier.citationpages31en
dc.description.sponsorshipprivateouien
dc.subject.ddclabelEconomie financièreen
dc.relation.conftitleXXIIèmes Journées d’Economie Monétaire et Bancaireen
dc.relation.confdate2005-06
dc.relation.confcityStrasbourgen
dc.relation.confcountryFranceen


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record