Usefulness Lost: Aggregating Information with Differing Levels of Verifiability

Glover, Jonathan C.; Ijiri, Yuji; Levine, Carolyn B.; Liang, Pierre Jinghong

doi:10.2139/ssrn.715207

Usefulness Lost: Aggregating Information with Differing Levels of Verifiability

29 Pages Posted: 7 May 2005

See all articles by Jonathan C. Glover

Carolyn B. Levine

Carnegie Mellon University - David A. Tepper School of Business

Pierre Jinghong Liang

Tepper School of Business, Carnegie Mellon University; CAFR/SAIF

Abstract

In this paper, we study information asymmetries about verifiability between a principal and an agent. Our main result is that an information asymmetry about verifiability not only reduces the usefulness of a given performance measure for stewardship purposes, it can completely destroy that performance measure's usefulness.

Keywords: Stewardship, Verifiability, Information Asymmetry

JEL Classification: C70, D82, M41

Suggested Citation: Suggested Citation

Glover, Jonathan C. and Ijiri, Yuji and Levine, Carolyn B. and Liang, Pierre Jinghong, Usefulness Lost: Aggregating Information with Differing Levels of Verifiability. Available at SSRN: https://ssrn.com/abstract=715207 or http://dx.doi.org/10.2139/ssrn.715207

Jonathan C. Glover (Contact Author)

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States
212-854-1911 (Phone)

Yuji Ijiri

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States
412-268-2303 (Phone)

Carolyn B. Levine

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Pierre Jinghong Liang

Tepper School of Business, Carnegie Mellon University ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-3315 (Phone)
412-268-6837 (Fax)

HOME PAGE: http://www2.tepper.cmu.edu/andrew/liangj

CAFR/SAIF ( email )

1954 Huashan Road
Shanghai P.R.China, 200030
China

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