Topic
Opportunism
About: Opportunism is a research topic. Over the lifetime, 2030 publications have been published within this topic receiving 97170 citations. The topic is also known as: opportunist.
Papers published on a yearly basis
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TL;DR: In this article, the authors revisited the opportunism problem faced by an upstream monopolist contracting with several retailers over secret agreements, when contracts are linear and characterized the equilibrium under secret contracts and compared it to that under public ones in a setting which allows for general forms of demand and retail competition.
Abstract: This paper revisits the opportunism problem faced by an upstream monopolist contracting with several retailers over secret agreements, when contracts are linear. We characterize the equilibrium under secret contracts and compare it to that under public ones in a setting which allows for general forms of demand and retail competition. We find that market distortions are more severe under secret contracts than public ones if and only if retailers' actions are strategic complements. We also investigate the effect of opportunism on firms' profits. Our main results remain robust whether retailers hold passive or wary beliefs. Finally, we discuss the implications of our results for the antitrust analysis of information exchange between competing retailers, and for the empirical analysis of 'Nash-in-Nash' models.
15 citations
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TL;DR: In this paper, the authors present an empirical methodology for identifying opportunism within a regulated setting, and apply it to the large-scale cost disallowances levied by state regulators on electric utilities during the 1980s.
Abstract: Large sunk costs and incomplete regulatory contracts in public utilities create the possibility of opportunistic behavior by either regulators or regulated firms. We present an empirical methodology for identifying opportunism within a regulated setting, and apply it to the large-scale cost disallowances levied by state regulators on electric utilities during the 1980s. Examining the investment propensity of all firms – both those that faced cost disallowances and those that did not – within particular regulatory jurisdictions, we find little evidence that cost disallowances were opportunistic. Instead, regulators appear to have been largely driven by the desire to punish specific poorly managed utilities.
15 citations
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TL;DR: In this paper, the authors investigated whether application of FVA in financial instruments valuation could have some potential impacts on earning quality measures of banks listed in the US and Europe, in order to better explain the exposure to FVA approach of changes in fair value asset and liabilities reported as gain and losses through net income.
Abstract: Financial reporting helps investors in the decisionmaking process. To reach this scope, IASB and FASB have chosen fair value accounting (hereafter “FVA”). The FVA links carrying amount to current market price rather than to the value of a past transaction, so it seems able to show potential cash flow generated from assets or liabilities included in financial statements (Tutino & Pompili, 2013). During recent years, an intense debate has arisen relative to FVA approach and the trade-off between relevance and reliability of accounting information reported adopting through FVA criterions. Many authors claim that fair value accounting based information is relevant and helpful for investors even if this approach makes a large use of unobservable inputs (Barth, 1994; Barth and Clinch, 1998; Barth, 2010). In our perspective, in case of lack of market values directly observable, the FVA approach could bring to adverse selection and moral hazard problem: when estimates are highly dependent on management choices, this potentially could bring to errors in estimates and, consequently, in an increase information asymmetry due to the use of private information not clearly reported to stakeholders. In such scenario, moreover, unobservable inputs could be used as earnings management tool in order to pursue their own goals aligning biased estimates able to meet investors’ expectations. After a quick look to the state of art on the management behaviour under FVA approach, adopting the Šodan Model (Šodan, 2015) this paper investigates whether application of FVA in financial instruments valuation could have some potential impacts on earning quality measures of banks listed in the US and Europe. In order to better explain the exposure to FVA approach of changes in fair value asset and liabilities reported as gain and losses through net income, the earning quality measure we Abstract
15 citations
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TL;DR: In this article, the authors studied the differences in regulatory design choices and performance outcomes across sectors, under the umbrella of similar nation-specific institutional characteristics (the same federal government producing reform during a short period of time (1990-95).
15 citations
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TL;DR: In this article, the authors argue that the governance structure of these alliances -specifically, the "contractual board" - provides an integrated restraint on opportunism, and that the board is composed of representatives from each alliance partner, each wielding equal power.
Abstract: Today, many biotechnology firms use strategic alliances to contract with other companies. This article contends that the governance structure of these alliances - specifically, the "contractual board" - provides an integrated restraint on opportunism. While an alliance agreement's exit structure could provide a check on opportunism by allowing the parties to exit at will, such exit provisions also can be used opportunistically. Most alliance agreements, therefore, provide for contractual "lock in" of the alliance partners, with only limited means of exit. Lock in, of course, raises its own concerns, and the contractual board - which typically is composed of representatives from each alliance partner, each wielding equal power - addresses these concerns about opportunism via the potential for deadlock.
15 citations