Download this Paper Open PDF in Browser

Information Technology and the Increasing Efficacy of Non-Legal Sanctions in Financing Transactions

46 Pages Posted: 31 Mar 2000  

Ronald J. Mann

Columbia University - Law School

Abstract

This paper investigates the effect of advances in information technology on the private institutions that businesses use to resolve information asymmetries in financing transactions. It discusses four separate effects. First, in some cases information technology will permit direct verification of the information, obviating the problem entirely; the paper discusses the example of the substitution of the debit card for the check, which provides an immediate payment that obviates the need for the merchant to consider whether payment will be forthcoming when the check is presented to the bank on which it is drawn. Second, the paper discusses how advances in information technology improve the functioning of reputational verification systems, with a special emphasis on the dis-intermediation of securities issuance. Third, the paper discusses the rise of intermediation by pooling in the area of securitization. The paper closes by discussing the information merchant, which can sell information directly to those who need it for their transactions.

Suggested Citation

Mann, Ronald J., Information Technology and the Increasing Efficacy of Non-Legal Sanctions in Financing Transactions. Vanderbilt Law Review, Vol. 54, p. 1627, 2001. Available at SSRN: https://ssrn.com/abstract=214634 or http://dx.doi.org/10.2139/ssrn.214634

Ronald J. Mann (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

Paper statistics

Downloads
297
Rank
85,405
Abstract Views
2,069