Asymmetric Payoff

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Asymmetric Payoff

A situation in which the settlement valuation on a security changes in a way other than a linear increase or decrease. Options are common instruments with asymmetric payoff. Forwards, on the other hand, generally have symmetric payoff.
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With regard to the contracting explanation, accounting conservatism reduces moral hazard problems caused by contracting parties with asymmetric information, asymmetric payoffs, limited horizons, and limited liability.
The major novelty of our article is to study by means of a laboratory experiment the impact of cheap talk communication and the emergence of turn taking in a symmetric two-player two-stage coordination game with asymmetric payoffs.
To reproduce this type of strategic situation, in the first stage of our finitely repeated two-stage coordination game with asymmetric payoffs, two players have to choose independently and simultaneously between two options, knowing that their decisions will determine the options that will be available in the second stage and thereby the attainable payoffs.
In testing the relationship between turn taking and communication, we hypothesize that preplay communication may facilitate the use of a turn-taking strategy in our two-stage game with asymmetric payoffs.
futures, forwards, swaps), where gains or losses accrue in magnitudes consistent with price changes in either direction, or those with asymmetric payoffs (e.
The combined effect of both of "uncertainty" and "managerial flexibility" may generate an asymmetric payoff condition called "contingent claim" where the project's revenue drastically shift and the fact one of the most popular capital budgeting theories, the NPV (Net Present Value) analysis, is limited to assess the value change caused by these asymmetric payoffs makes people seek alternations to resolve this issue.
The managerial flexibilities provide specific kinds of asymmetric payoffs analogous to those of the derivatives in a financial market.
This transformation is flexible for describing option-like and other asymmetric payoffs based on a symmetrically distributed underlying variable.
P]) describes the negatively asymmetric payoffs of a typical insurance contract--occasional large negative outcomes offset by far more frequent small positive outcomes.
Under this contracting explanation, conservative accounting is a means of addressing moral hazard caused by parties to the firm having asymmetric information, asymmetric payoffs, limited horizons, and limited liability.
Litigation also produces asymmetric payoffs in that overstating the firm's net assets is more likely to generate litigation costs for the firm than understating net assets.
These asymmetric payoff effects can be accentuated by shifts in parameters that do not alter the Nash predictions.
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