Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return
Game theory, or interactive decision-making theory, is a mathematical framework that helps predict the outcomes of a group of interacting agents. This research aims to design and describe strategic relations between managers and shareholders through signaling games. The study investigates the conseq...
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| Format: | Article |
| Language: | English |
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Ferdowsi University of Mashhad
2025-04-01
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| Series: | Iranian Journal of Accounting, Auditing & Finance |
| Subjects: | |
| Online Access: | https://ijaaf.um.ac.ir/article_45778_4bcc29d80d95983e2ff464b50c071281.pdf |
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| _version_ | 1849735400899215360 |
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| author | Zahra Moghadam Hamzeh Didar Kiumars Shahbazi Ali Ebadian |
| author_facet | Zahra Moghadam Hamzeh Didar Kiumars Shahbazi Ali Ebadian |
| author_sort | Zahra Moghadam |
| collection | DOAJ |
| description | Game theory, or interactive decision-making theory, is a mathematical framework that helps predict the outcomes of a group of interacting agents. This research aims to design and describe strategic relations between managers and shareholders through signaling games. The study investigates the consequences of choosing strategies by managers (high and low quality of information disclosure) and its relationship with the strategies chosen by shareholders (high and low expected return of shareholders) and (high and low quality of audit services) in companies with different levels of internal control establishment. The statistical population of research consists of all companies listed in the Tehran stock exchange market from 2012 to 2021. 114 companies were considered as a statistical sample of research. The study outcomes illustrate that Bayesian Nash equilibrium is established in the strategy (high-quality information disclosure and low expected return) in the strong internal control environment and the strategy (low-quality information disclosure and high expected return) in the weak internal control environment. In these strategies, neither the manager nor the shareholder has the motivation to change the strategy because their benefits will not increase by changing their strategy. |
| format | Article |
| id | doaj-art-b4ff373239b94b7abe3984a39282ecee |
| institution | DOAJ |
| issn | 2717-4131 2588-6142 |
| language | English |
| publishDate | 2025-04-01 |
| publisher | Ferdowsi University of Mashhad |
| record_format | Article |
| series | Iranian Journal of Accounting, Auditing & Finance |
| spelling | doaj-art-b4ff373239b94b7abe3984a39282ecee2025-08-20T03:07:34ZengFerdowsi University of MashhadIranian Journal of Accounting, Auditing & Finance2717-41312588-61422025-04-019212010.22067/ijaaf.2025.45778.146945778Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected ReturnZahra Moghadam0Hamzeh Didar1Kiumars Shahbazi2Ali Ebadian3Urmia University, Departmant of accounting, Urmia, IranDepartment of Accounting, Urmia University, Urmia, IranDepartment of Economic Sciences, Urmia University, Urmia, IranDepartment of Mathematics, Urmia university, Urmia, Iran.Game theory, or interactive decision-making theory, is a mathematical framework that helps predict the outcomes of a group of interacting agents. This research aims to design and describe strategic relations between managers and shareholders through signaling games. The study investigates the consequences of choosing strategies by managers (high and low quality of information disclosure) and its relationship with the strategies chosen by shareholders (high and low expected return of shareholders) and (high and low quality of audit services) in companies with different levels of internal control establishment. The statistical population of research consists of all companies listed in the Tehran stock exchange market from 2012 to 2021. 114 companies were considered as a statistical sample of research. The study outcomes illustrate that Bayesian Nash equilibrium is established in the strategy (high-quality information disclosure and low expected return) in the strong internal control environment and the strategy (low-quality information disclosure and high expected return) in the weak internal control environment. In these strategies, neither the manager nor the shareholder has the motivation to change the strategy because their benefits will not increase by changing their strategy.https://ijaaf.um.ac.ir/article_45778_4bcc29d80d95983e2ff464b50c071281.pdfaudit qualitydisclosure qualityexpected returnnash bayesian equilibriumsignaling games |
| spellingShingle | Zahra Moghadam Hamzeh Didar Kiumars Shahbazi Ali Ebadian Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return Iranian Journal of Accounting, Auditing & Finance audit quality disclosure quality expected return nash bayesian equilibrium signaling games |
| title | Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return |
| title_full | Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return |
| title_fullStr | Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return |
| title_full_unstemmed | Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return |
| title_short | Game Theory-Based Analysis of the Relationship between Managers and Shareholders: An Emphasis on Information Disclosure Quality, Audit Quality and Expected Return |
| title_sort | game theory based analysis of the relationship between managers and shareholders an emphasis on information disclosure quality audit quality and expected return |
| topic | audit quality disclosure quality expected return nash bayesian equilibrium signaling games |
| url | https://ijaaf.um.ac.ir/article_45778_4bcc29d80d95983e2ff464b50c071281.pdf |
| work_keys_str_mv | AT zahramoghadam gametheorybasedanalysisoftherelationshipbetweenmanagersandshareholdersanemphasisoninformationdisclosurequalityauditqualityandexpectedreturn AT hamzehdidar gametheorybasedanalysisoftherelationshipbetweenmanagersandshareholdersanemphasisoninformationdisclosurequalityauditqualityandexpectedreturn AT kiumarsshahbazi gametheorybasedanalysisoftherelationshipbetweenmanagersandshareholdersanemphasisoninformationdisclosurequalityauditqualityandexpectedreturn AT aliebadian gametheorybasedanalysisoftherelationshipbetweenmanagersandshareholdersanemphasisoninformationdisclosurequalityauditqualityandexpectedreturn |