Asymmetric Information in Finance Explained - Raghavendra Rau

[@henghistbluetooth7882]

Milton Friedman and Jack Welch, Ronald Reagan and Margaret Thatcher all took this to heart. And 45 years of economic devastation later…

[@danwylie-sears1134]

Shareholders get paid _first,_ unless dividends can be clawed back in bankruptcy. (They can't be.) The vast majority of company founders know _less_ about the value of their companies than an analyst specializing in that industry, with access to all sorts of specialists in related fields, and with the expectation of repeated use of that expertise in evaluating many firms. In many cases, if the founder had an accurate idea of the value of the firm when they started sinking their startup costs, they wouldn't have founded it. So firms tend to be founded by extreme optimists.

[@Andre-qo5ek]

if the primary goal of a business is to the shareholders.... then they are by definition anti-social. um... shareholders are NOT paid at the end... when the shareholder is focused on they are being "paid FIRST" in spirit. they are positioning the payment as the primary goal. just because they get they check cut "last" compared to a direct employees weekly/biweekly/monthly check. this talk is such bull.. it is just simping for shareholders. the TLDR " shareholders are insecure babies and becasue they feel their "risk" is higher they should be allowed to put their thumb on the scale to reduce that risk.

[@unclepete2252]

Agree, this is politics disguised as facts.

[@danwylie-sears1134]

No, it's theory. In a world that's so simplified as to be easy to theorize about, everyone's interests would be best served by having management. If you make a job more pleasant for workers, or less so, that will be completely reflected in their wages (because that way, we don't have to think about it in our theory); if you do better or worse at accommodating suppliers' need for flexibility in delivery schedule or change your specifications to let them use cheaper materials, or whatever concern suppliers might have, that will be completely reflected in the prices they charge you (again, because that means it doesn't complicate the theory). Likewise, we don't have to worry about undue influence in government, or customers getting a bad deal, because we just assume it away, in the interests of having a scenario we can theorize about.

[@Andre-qo5ek]

again ... more bull.... " the principal can use a mixture of explicit or implicit contracts to control the agent " in what world does the homeowner draft the contract for a painter!?!?!?! no ... the painter's business writes the contract... the BUSINESS has the contract power. what are you talking about here

[@jhanalexander5377]

No it’s Behavioural economics.