Hong Ming is a final year PhD candidate at the Institute of Operations Research and Analytics, National University of Singapore. His research interests include stochastic modelling, information economics, and decision making under uncertainty. He has won teaching awards and was previously a lecturer at Temasek Polytechnic where he was subject leader and also co-authored three textbooks.
| Name of Speaker | Tan Hong Ming |
| Schedule | 20 October 2021, 10am |
| Link to Register | https://nus-sg.zoom.us/meeting/register/tZAldeGqqjIqHN3Ww-3WJ8rbHo9m5QGIMuP- |
| Title | Risky Investments under Static and Dynamic Information Acquisition |
| Abstract | This thesis studies risky investments under different information acquisition processes. Under a dynamic information acquisition process, the investor’s unconditional expected optimal quantity of information and investment amount are higher than those under the corresponding static information acquisition process. However, when the initial belief of the investment payoff is either high or low, static and dynamic information acquisitions provide similar expected results. To incentivize firms to acquire information and invest when the initial belief of a risky investment payoff is mediocre, governments should allow firms to obtain information dynamically. This has implications on, e.g., clinical trials. Furthermore, the falling marginal cost of information raises investment amounts and leverage, which leads to higher losses during crises. Hence, companies need to understand their tail risks better. |
