Markers of information asymmetry on different types of markets and contemporary methods of its reduction: peculiarities of implication and estimation of effectiveness
Proxies of information asymmetry on different types of markets and contemporary methods of its reduction: peculiarities of implication and estimation of effectiveness.
Healthcare, like any area of human activity involving the use of limited resources of society, faces two primary objectives: achieving efficiency and fairness in the provision of medical services. As is well known, in most cases the competitive market ensures the optimal allocation of resources.
However, healthcare has some distinctive features which give rise to market failure in this area, resulting in state intervention in the economic relations between the providers (hospitals and doctors) and consumers of medical services, and leads to the emergence of the institution of insurance. The economic aspects of healthcare predetermine a special mechanism for the functioning of this market, and allow us to talk of special types of competition in this sector. The aim of this article is to describe and analyse manifestations of market failure in healthcare in order to subsequently develop measures to reduce costs and increase the profitability of this area.
This paper investigates the offer price setting process of Russian banks and companies’ public offerings between 2007 and 2014. The results show that Russian banks and companies face the problem of Underpricing that prevents them from getting lager amounts of capitalization
To make effective managerial decisions, business needs development guidelines. It is shown, on the example of the Russian raw material sector, that traditional approaches to performance indicators have shortcomings. Part of the proposed models does not reach the set goals in practice. The issues of evolving management on the basis of the criterion of development and the validity of investors' choice remain unresolved. Business needs a system that allows obtaining objective data (both resultant and advanced) about the object as a whole and the risks for individual sites. The specifics of doing business in the raw material sector require correction of valuation methods. Based on the practice of using the cost concept by Russian raw materials companies, the author gives recommendations for developing an effective business management system, building a decision making system with the respect to the company's corporate strategy and strategies for competing business units. Analysis of the experience of raw materials companies allows us to state that the success of the activity can be achieved not only by the use of effective technology and new technologies, but also by the adoption of managerial decisions:
• the company's strategy is decomposed into a system of long-term and short-term target standards;
• the main criterion is detailed, responsibility for achieving its components is distributed;
• the strategy is translated into the language of concrete measures through plans and budgets;
• target indicators as a means of expressing the intentions of the company are based on key factors and correspond to the level of management, short-term target standards are tied to long-term ones. The importance of taking into account the specific features of doing business in the raw materials sector (the company's security in proven reserves, etc.) is demonstrated. Analysis of independent rating agencies, which reduces information asymmetry, is needed while assessing the attractiveness of an asset. The investment attractiveness of the raw material assets is largely determined by the fundamental factors of growth (the level of reserves, volumes of extraction and transportation, operating efficiency, the amount of capital expenditure). Their significance varies over time, but the role as a foundation remains.
Book Review: Karpik L. (2010) Valuing the Unique: The Economics of Singularities, Princeton; Oxford: Princeton University Press (primum editae: Karpik L. (2007) L’économie des singularités, Paris: Gallimard).
Choosing a good novel, a fancy restaurant, artwork, or a qualified specialist practitioner cannot be understood with the help of theories of exchange mechanisms offered by economics. Lucien Karpik suggests the concept of “singularity” for analyzing consumer choice of high-quality unique goods. The main attributes of “singularities” include multidimensionality, uncertainty, and incommensurability. The important traits of markets for singularities include opacity and opportunism, the necessity for coordination mechanisms, the dominance of quality competition over price competition, and the impossibility to explain price setting with the supply-demand equilibrium. Markets for singularities contain judgment devices (e.g. guides, expert reviews, laureate lists) which help consumers to make a choice. These devices are used in order to reduce uncertainty, providing consumers with necessary knowledge. These devices include networks, certificates of quality, expert systems, ratings (composed by experts or developed by the market), techniques of consumer manipulation and forms of product demonstration at points of sales. Markets for singularities are governed on the basis of several coordination regimes. Thus, the “regime of authenticity” can be found within markets of expensive wine based on guarantees of quality. “Mega-regime” refers to situations where brand names signal a certain quality, such as global movie producers, luxury apparel manufactures, and so on. The “regime of expert opinion” exists within constrained markets, including books, movies, theatre performances, etc. The “regime of professional coordination” is applied to markets of personal services such as physicians or architects, where service suppliers are governed by professional ethics and associations. Prices for singularities are not determined by the standard equilibrium mechanism of supply and demand, but instead are set based on restraints of volume production. A market for a singularity also implies great discrepancies in prices for top-tier products by ratings versus goods produced for mass consumption.