• KDI Journal of Economic Policy
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• v.12 no.2
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• pp.95-120
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• 1990

The underpricing of new shares of a firm that are offered to the public for the first time (initial offerings) is well known and has puzzled financial economists for a long time since it seems at odds with the optimal behavior of the owners of issuing firms. Past attempts by financial economists to explain this phenomenon have not been successful in the sense that the explanations given by them are either inconsistent with the equilibrium theory or implausible. Approaches by such authors as Welch or Allen and Faulhaber are no exceptions. In this paper, we develop a signalling model of capital investment to explain the underpricing phenomenon and also analyze the efficiency of investment. The model focuses on the information asymmetry between the owners of issuing firms and general investors. We consider a firm that has been owned and operated by a single owner and that has a profitable project but has no capital to develop it. The profit from the project depends on the capital invested in the project as well as a profitability parameter. The model also assumes that the financial market is represented by a single investor who maximizes the expected wealth. The owner has superior information as to the value of the firm to investors in the sense that it knows the true value of the parameter while investors have only a probability distribution about the parameter. The owner offers the representative investor a fraction of the ownership of the firm in return for a certain amount of investment in the firm. This offer condition is equivalent to the usual offer condition consisting of the number of issues to sell and the unit price of a share. Thus, the model is a signalling game. Using Kreps' criterion as the solution concept, we obtained an essentially unique separating equilibrium offer condition. Analysis of this separating equilibrium shows that the owner of the firm with high profitability chooses an offer condition that raises an amount of capital that is short of the amount that maximizes the potential profit from the project. It also reveals that the fraction of the ownership of the firm that the representative investor receives from the owner of the highly profitable firm in return for its investment has a value that exceeds the investment. In other words, the initial offering in the model is underpriced when the profitability of the firm is high. The source of underpricing and underinvestment is the signalling activity by the owner of the highly profitable firm who attempts to convince investors that his firm has a highly profitable project by choosing an offer condition that cannot be imitated by the owner of a firm with low profitability. Thus, we obtained two main results. First, underpricing is a result of a signalling activity by the owner of a firm with high profitability when there exists information asymmetry between the owner of the issuing firm and investors. Second, such information asymmetry also leads to underinvestment in a highly profitable project. Those results clearly show the underpricing entails underinvestment and that information asymmetry leads to a social cost as well as a private cost. The above results are quite general in the sense that they are based upon a neoclassical profit function and full rationality of economic agents. We believe that the results of this paper can be used as a basis for further research on the capital investment process. For instance, one can view the results of this paper as a subgame equilibrium in a larger game in which a firm chooses among diverse ways to raise capital. In addition, the method used in this paper can be used in analyzing a wide range of problems arising from information asymmetry that the Korean financial market faces.

• Journal of Information Technology Services
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• v.18 no.5
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• pp.165-182
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• 2019

An equity crowdfunding system of Korea has been introduced since January 25, 2016. The crowdfunding has contributed to remove the funding gap for startups in Korea. In the three years since the introduction of the system, the amount issued has been growing annually 31 percent. In 2018, the general investors who participated in equity crowdfunding, account for 93.8% of the total market size. General investors are a large part of equity crowdfunding. Investors, however, are facing the information asymmetry problems. General investors rely heavily on the investment prospectus provided by startups to obtain the information they need to determine their investment decisions. Under these circumstances, startups have the incentive to provide information that is advantageous to them, and investors are likely to be adversely affected by the investment prospectus. In this study, we collected the novel crowdfunding prospectus dataset: a total of 459 investment prospectus and conducted a morphological analysis. The analysis showed that the more positive the word, the higher the success rate of investors' subscriptions. We also compared projects that were heavily invested by general investors with projects that were heavily invested by professional investors. Then, we were able to examine that the success rates of project subscription, which were heavily invested by general investors, were higher than the projects of professional investor type. It can be interpreted as a general investor driven crowdfunding market. Based on these results, we propose three policies. First, the supervisor should be strengthened to provide more detailed information on investment risk factors in the prospectus. Second, the crowdfunding intermediary should monitor information provided by startups. Third, an investor should be asked to add a question to the investment compliance test that allows the investor to recognize the problem in the manual.

• Journal of Digital Convergence
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• v.15 no.8
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• pp.501-509
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• 2017

The purpose of this study was to review the effects of the physical fatigue induced by overtraining on cognitive information processing and emotional change of athletes by neurophysiologic study. And to provide basic data for the athletes and coaches in the sports field to improve understanding of the overtraining symptoms from the brain physiological point of view. We reviewed the domestic and international academic materials and research reports published in the last 20 years using electronic databases and examined the literature that is consistent with the purpose of this study among the retrieved documents. Based on the reviewed literature, we examined the cognitive information processing and emotional change of the athlete according to the training, and overtraining can accumulate the fatigue of the body, which can cause severe side effects in terms of cognitive ability and emotional ability of athletes as well as deterioration of performance. The study using P300 and EEG cerebral hemispheric asymmetry difference indices also confirmed the possibility of a new approach to understand psychological and physiological effects of overtraining on information processing and emotional changes.

• Language and Information
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• v.8 no.2
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• pp.93-110
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• 2004

This paper discloses a striking similarity between Korean/Japanese wh-NPs and Italian QPs: both categories are disallowed from LD-movement out of weak islands. This leads us to a substantial claim that wh-phrases in the former languages possibly belong to a non-D-linked category, parallel to the Italian QPs. This claim is also supported by semantic evidence: that is, in-situ wh-NPs in these languages lack covert partitivity (Kyungnam University)

• The Korean Journal of Applied Statistics
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• v.25 no.6
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• pp.1019-1026
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• 2012

This paper presents a method for the identification of "edge observations" located on a boundary area constructed by a truncation variable as well as for the identification of outliers and the after fit of multivariate skew $t$-distribution(MST) to asymmetric data. The detection of edge observation is important in data analysis because it provides information on a certain critical area in observation space. The proposed method is applied to an Australian Institute of Sport(AIS) dataset that is well known for asymmetry in data space.

• Journal of Korea Multimedia Society
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• v.6 no.4
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• pp.620-629
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• 2003

Fingerprinting schemes are techniques applied to protect the copyright on digital goods. These enable the merchants to identify the source of illegal redistribution. Let us assume the following situations connectedly happen: As a beginning, buyer who bought digital goods illegally distributed it, next the merchant who found it revealed identity of the buyer/traitor, then the goods is illegally distributed again. After this, we describe it as“The second illegal redistribution”. In most of anonymous fingerprinting, upon finding a redistributed copy, a merchant extracts the buyer's secret information from the copy and identifies a traitor using it. Thus the merchant can know the traitor's secret information (digital fingerprints) after identification step. The problem of the second illegal distribution is that there is a possibility of the merchant's fraud and the buyer's abuse: that is a dishonest employee of the merchant might just as well have redistributed the copy as by the buyer, or the merchant as such may want to gain money by wrongly claiming that the buyer illegally distributed it once more. The buyer also can illegally redistribute the copy again. Thus if the copy turns up, one cannot really assign responsibility to one of them. In this paper, we suggest solution of this problem using two-level fingerprinting. As a result, our scheme protects the buyer and the merchant under any conditions in sense that (1) the merchant can obtain means to prove to a third party that the buyer redistributed the copy. (2) the buyer cannot worry about being branded with infamy as a traitor again later if he never distribute it.

• The Journal of Economics, Marketing and Management
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• v.11 no.2
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• pp.23-32
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• 2023

Purpose: This study examines the effect of full information disclosure on seller profit when there exists information asymmetry between sellers and buyers, focusing on the risk averseness of buyers. By investigating the interaction between product quality and perceived risk through online sales data, we attempt to figure out the incentive structure of full information disclosure specifically when buyers are risk-averse, so that we can suggest more feasible information disclosure strategy to sellers. Research design, data and methodology: Our empirical model analyzes the sales data of collectible goods from a major online seller using Poisson regression. In our model, we have specifically considered risk-averseness of buyers by estimating the interaction effect between the product quality and perceived risk on seller profit, aiming for a more precise empirical analysis on sellers' incentive structure of full disclosure. Results: Our empirical analysis strongly supports the effect of interaction between product quality and perceived risk, showing that the incentive for full disclosure is much stronger when product quality is higher, and vice versa. Therefore, sellers are strongly encouraged to voluntarily reveal product weaknesses when their product quality is higher than average, while it is more profitable to hide any product defects when quality claim is lower than average. Conclusions: This study supports the related literature by confirming economic incentives for full disclosure, and also supplements and strengthens previous studies by presenting that the effect of interaction between product quality and perceived risk strongly affects seller profit. Our unique finding supports both mandatory disclosure and voluntary disclosure arguments and presents practical implications to marketing managers by suggesting that seller's incentive for revealing weaknesses depends on the level of seller's product quality.

• Information Systems Review
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• v.19 no.3
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• pp.47-67
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• 2017

The sharing economy has emerged as a new form of consumption pattern along with the advancement of information technology and the changes in the consumers' desires for economic spending. In a C2C-sharing economy platform, the user side and supplier side share the same assets, thereby making both sides of the market closely related. However, an information asymmetry exists within the platform that makes the players from one side reluctant to participate. This information asymmetry warrants a strategic approach for solving the fundamental "chicken and egg" problem for platform development. Motivated by this phenomenon, this study aims to analyze how the participation intentions from both sides of the platform are influenced by certain anteceding factors, such as trust, perceived risk, and perceived economic profit. Our findings show that the anteceding factors affect the participation intentions in different paths for both sides of the platform. As a managerial implication, these findings highlight the necessity of employing different approaches for each side of market development.

• The Korean Journal of Pain
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• v.19 no.2
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• pp.159-163
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• 2006

Background: Despite the enormous amount of basic research on neuropathic pain, there is the lack of an objective diagnostic test for complex regional pain syndrome (CRPS). The aim of this study was to evaluate the usefulness of cold stress thermography in the diagnosis of CRPS. Methods: The study involved 12 patients with CRPS type 1, according to the IASP criteria, who were compared with 15 normal healthy volunteers. All subjects underwent thermographic examination under baseline conditions at $21^{\circ}C$. A cold stress test (CST; $10^{\circ}C$ water for 1 minute) was then applied to both hands below the wrists, immediate, and after 10 and 20 minutes. Results: The temperature asymmetry between the patients with CRPS and the volunteers showed significant discrimination at the baseline and after a 20 minute recovery period from the CST. Among the study subjects having temperature asymmetry of both hands of less than $1^{\circ}C$ (8 out of 12 CRPS patients and 14 out of 15 volunteer), 7 (87.5%) of the 8 CRPS patients and 3 (21%) of the 14 volunteers showed a temperature difference of more than $1^{\circ}C$ after the 20 minute recovery period. The actual temperature values during the four periods did not discriminate between the patients with CRPS and the volunteers. Conclusions: Thermography, under the CST, could be a more objective test for the diagnosis of CRPS. A temperature asymmetry greater than $1^{\circ}C$ during the 20 minute recovery period following CST provides strong diagnostic information about CRPS, with both high sensitivity and specificity.

• Journal of the Korean Institute of Intelligent Systems
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• v.24 no.1
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• pp.96-101
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• 2014

Wind power is the fastest growing renewable energy source in the world and it is expected to remain so for some times. Recently, there is a constant need for the reduction of Operational and Maintenance(O&M) costs of Wind Energy Conversion Systems(WECS). The most efficient way of reducing O&M cost would be to utilize CMS(Condition Monitoring System) of WECS. CMS allows for early detection of the deterioration of the wind generator's health, facilitating a proactive action, minimizing downtime, and finally maximizing productivity. There are two types of faults such as mass unbalance and aerodynamic asymmetry which are related to wind turbine's rotor faults. Generally, these faults tend to generate various vibrations. Therefore, in this work a simple fault detection algorithm based on spectrums of vibration signals and simple max-min decision logic is proposed. Furthermore, in order to verify its feasibility, several simulation studies are carried out by using GH-bladed software.