Conflicted Analysts and Initial Coin Offerings

Alexander Wagner, Andreas Barth, Valerie Laturnus and Sasan Mansouri

No 16200, CEPR Discussion Papers from Centre for Economic Policy Research

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 due to 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. 90 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 the failure of ICOs is related to conflicts of interest.

Keywords: Analysts; Asymmetric information; Fintech; Initial coin offering (ico) (search for similar items in EconPapers)
JEL-codes: D82 D83 G14 G24 L26 (search for similar items in EconPapers)
Date: 2021-05
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Journal Article: Conflicted Analysts and Initial Coin Offerings (2023)
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