Conflicted Analysts and Initial Coin Offerings

Andreas Barth, Valerie Laturnus (), Sasan Mansouri () and Alexander Wagner
Additional contact information
Valerie Laturnus: Goethe University Frankfurt, 60629 Frankfurt am Main, Germany
Sasan Mansouri: Goethe University Frankfurt, 60629 Frankfurt am Main, Germany; Leibniz-Institut für Wirtschaftsforschung Halle, 06108 Halle (Saale), Germany

Management Science, 2023, vol. 69, issue 11, 6641-6666

Abstract: This paper studies the contribution of analysts to the functioning and failure of the market for initial coin offerings (ICOs). The assessments of freelancing analysts exhibit biases because of reciprocal interactions of analysts with ICO team members. Even favorably rated ICOs tend to fail raising some capital when a greater portion of their ratings reciprocate prior ratings. Ninety days after listing on an exchange, the market capitalization relative to the initial funds raised is smaller for tokens with more reciprocal ratings. These findings suggest that conflicts of interest help explain the failure of ICOs.

Keywords: analysts; asymmetric information; blockchains; conflicts of interest; fintech; initial coin offering (ICO) (search for similar items in EconPapers)
Date: 2023
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http://dx.doi.org/10.1287/mnsc.2021.02928 (application/pdf)

Related works:
Working Paper: Conflicted Analysts and Initial Coin Offerings (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:11:p:6641-6666

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