"Under the conditions of asymmetric information and the endogenous nature of the transaction behavior itself, why can we regard this proactive behavior as a positive signal rather than part of adverse selection?"
After finishing, the professor tapped twice gently with a fountain pen on the few pages of paper Satsuki had brought.
In a certain research lab at Gakushuin University, the window was opened a crack.
The heat of the June afternoon crept in from outside, and a few unweighted documents at the corner of the desk fluttered gently in the breeze.
The professor reached out, moved an unused ashtray over to hold them down, and then looked back at Satsuki sitting opposite.
"This is the question you wrote in the margin last time."
"You wrote three pages of text, but I actually think this single sentence is more interesting than those three pages."
Satsuki lowered her head and glanced at it.
That was indeed what she had written.
A few days ago during class when talking about asymmetric information, she casually added a line next to it.
Originally, she just felt that the traditional lemons market model simplified the behavior of both parties to the transaction far too much in order to highlight the adverse selection mechanism.
Sellers in reality would proactively quote prices, disclose information, and find ways to prove that what they held was not a "lemon."
But now, seeing this sentence again, the first thing that appeared in Satsuki's mind was a middle-aged man standing sweating profusely at the gates of Gakushuin.
Tsuchiya.
Proactively seeking them out.
Proactively requesting to sell control.
Proactively offering to let Saionji inspect the accounts.
Even whether he could continue to serve as president in the future could be left to Saionji to decide.
It was simply too proactive.
So proactive that anyone genuinely prepared to spend money should think twice.
"Does the professor mean that as long as the seller acts more anxious than others, the buyer should suspect that something is wrong with what the seller holds?"
"If you are buying with your own money, I suggest starting with suspicion."
The professor smiled and picked up the teacup.
"However, suspicion is only the starting point. When a seller proactively sells, it is indeed possible because he knows some bad news that the buyer does not know, or perhaps he realized some change earlier than others. Both types of people will make very similar actions on the surface."
"That is precisely the problem."
Satsuki leaned back into her chair.
A few months ago, when she began preparing the securities plan, things were actually much simpler.
Saionji lacked a domestic securities gateway.
S.A. Investment could conduct securities transactions in New York, London, and offshore markets, and the group's own financial company could already provide financing, acquire debt claims, and arrange reorganizations.
However, once returning to Japan domestically, corporate accounts, corporate brokerage, underwriting, exchange seats, and daily settlement still needed to pass through someone else's hands.
When the scale was small, this bit of trouble did not amount to much.
But now that Saionji had developed to this extent, keeping securities transactions on the counters of other companies for a long time was becoming increasingly inappropriate, whether viewed from the perspectives of cost, efficiency, or information security.
Therefore, she had people select a batch of mid-sized securities companies very early on.
The scale did not need to be too large, and the business outlets did not need to spread all over the country.
What she truly cared about were the securities business license, exchange qualifications, corporate department, clearing and settlement, and the personnel and equipment that could quickly integrate into the Saionji system.
Then she only needed to wait.
Waiting for that securities scandal to tear a gap in the industry's credit.
And now this step had already happened.
Nomura's compensation for losses was dug up, and Nikko followed suit with trouble.
Client relationships with major securities firms that were once taken for granted began to be re-examined by corporate finance departments for the first time.
Over at The Club, the inspection levels for loans, guarantees, accounts, and transactions had all been raised, and the securities preparation team was also eyeing those corporate clients and sales personnel who might loosen up.
Susumu Ishii's side had also been dealt with.
He accepted the conditions proposed by Saionji, and was willing to cooperate in clearing up his dealings between himself, securities companies, and affiliated companies, while providing the materials Saionji needed.
Maki was in charge of the subsequent handover, and invitations to the three major yakuza syndicates had already been sent out.
This matter temporarily did not require Satsuki to spend any more energy.
The financing, accounts, and networking relationships left behind by Ishii in the past could instead help the securities preparation team figure out faster how many things were left between major securities firms and those special clients that had not yet been dug up by the news.
Up to now, the things arranged beforehand were all advancing according to plan.
Next, it was only necessary to choose a company from the list, negotiate control, send people in to inspect the accounts, and then take over the entire set of securities businesses.
Sanyo Securities was originally just one company on that list.
But now Tsuchiya had run up in front of her himself.
Thus, a transaction where Saionji originally chose the seller suddenly gained a seller who proactively chose Saionji.
Satsuki's fingers tapped gently on the edge of the notebook on her lap.
"Then what if the seller is willing to let me inspect?"
The professor put down the teacup.
"Inspected to what extent?"
"Everything."
"What does everything mean?"
Satsuki raised her eyes.
The professor smiled and looked at Satsuki.
"Saionji-san, the most troublesome word in reality is 'everything.'"
"Buying an old machine, you can dismantle the shell, view the maintenance records, and invite engineers to test it."
"But how much money do you need to spend, to what extent should it be dismantled, and how many parts must operate for a few months before you know if there are problems?"
As he spoke, he casually pointed to the air conditioner by the wall that had been used for many years.
"Suppose I want to sell this machine to you. I know it had a problem last summer, and I also know the person who repaired it only temporarily suppressed the malfunction."
"You ask me if you can inspect it, and I will tell you to inspect it however you like. You can even call the maintenance personnel over together."
"As long as I know that trouble is very unlikely to reappear within two hours, letting you inspect it however you want causes me no loss."
Satsuki looked thoughtfully at that air conditioner.
Sanyo was the same.
Tsuchiya had already proactively told her that Sanyo had problems that needed to be dealt with.
Affiliated companies, proprietary positions, and special clients left over from the past.
It sounded very candid.
But what if the truly dangerous things happened to be hidden behind these words?
Tsuchiya knew Saionji would inspect the accounts, and he also knew what due diligence could uncover.
A person who had worked in the securities industry for decades, if he truly wanted to leave certain risks to the next generation of shareholders, would never be foolish enough to write a line in the books saying "There are problems here, please inspect carefully."
"That being said, allowing inspection itself does not explain much."
"It has value, just do not estimate that value too high."
The professor picked up his fountain pen again and drew two simple boxes on the paper.
"Asymmetric information is hard to resolve with just a phrase of 'I am willing to disclose.' Meaningful signals often require paying a cost."
Satsuki looked at those two boxes.
"For example?"
"Still the machine from just now."
The professor thought for a moment.
"After I sell it to you, if I am willing to continue providing three years of maintenance, and repair costs exceeding normal wear and tear are borne by me, what would you think?"
"I would feel that the professor has quite a bit of confidence in this machine."
"Why?"
"Because if the machine really had serious problems as you yourself knew, and you still had to pay after selling it, you would only have moved the thing out of the research lab while the risk still remained on yourself."
The professor smiled and nodded.
"This is starting to get interesting."
"The seller says he has confidence and is very cheap. Allowing you to take a few looks might also not cost much."
"But when his returns continue to be affected by the true quality of the commodity, every word he says starts to become expensive."
Satsuki looked down at the boxes on the paper.
Tsuchiya had said something before.
If Saionji thought he was still useful, he was willing to stay.
At the time it sounded like just a statement of attitude.
Thinking about it again now, it had another layer of meaning.
But it was still not enough.
Willing to stay, he could stay as a consultant.
A board position without real power could be retained.
Or he could stay for half a year after the control handover was completed, and then find a decent excuse to retire.
If what Tsuchiya wanted to sell was a burden he already knew was about to rot, this kind of "staying" could hardly be counted as a cost.
"What if the seller's ability to bear responsibility might also disappear?"
Satsuki raised her head.
"After the company is sold, the control in his hands is already gone. If a problem really arises, he can well say he tried his best. Even the person can leave."
The professor looked at her for a few seconds.
"So what you need is not just a promise."
He drew a line between the two boxes.
"You have to keep the post-transaction interests bound together."
"The simplest method is to withhold a portion of the payment. After a period of time confirming there are no hidden problems, then give it out."
"The management team is the same. Position, compensation, and subsequent permissions can all be tied to results."
The professor paused, then added again.
"However, if you truly want to judge a person's type, there is an even more convenient way."
"Give him choices?"
Satsuki asked.
The professor raised an eyebrow.
"It seems you have already thought of it."
"Different people facing the same set of conditions will choose different paths themselves."
Satsuki leaned forward slightly.
"If a seller believes that what he hands over has no serious problems, he will be more willing to accept deferred payment and more willing to continue bearing subsequent responsibilities."
"If he just wants to throw the risk away as soon as possible, what he cares about most will be how much money he can get today and when he can leave completely."
The professor nodded.
"This kind of arrangement is very common in information economics. You do not need to read what is really in his heart; you only need to design good conditions so that different types of people expose themselves."
"Of course, reality will not be as clean as a model. People will lie, misjudge their own things, and may also overestimate their own abilities."
The professor put the fountain pen back on the desk.
"However, compared to sitting there guessing whether he is a person worthy of trust, this is at least much more reliable."
Satsuki looked down at her page of notes.
She suddenly felt that making this one-hour appointment today was worth it.
Whether Sanyo was a good target could actually be checked.
Accounts could be checked, assets could be checked, and clients could be checked.
The trading system could also be tested by professionals.
What truly made her hesitate was Tsuchiya himself.
Because this person appeared far too early.
In the history within her memory, Sanyo would later head toward bankruptcy due to long-term losses and the deterioration of affiliated financial assets.
But the Tsuchiya before her eyes had already proactively run over to tell her in 1991:
The room for Sanyo to walk down alone would become smaller and smaller.
The securities industry would rely more on information systems in the future.
What Saionji lacked happened to be what Sanyo already possessed.
He was even willing to hand over control while Sanyo was still valuable.
If these judgments all came from himself, then this person's value might very well be higher than Sanyo's securities license.
But if he had already seen certain risks that had not yet surfaced, and wanted to stuff the whole burden over while taking the opportunity of Saionji entering the securities industry...
Then his "cleverness" would turn into a problem in another direction.
Just moments ago, Satsuki was still wondering which explanation to believe.
Now it seemed there was no need to think anymore.
Just let Tsuchiya choose for himself.
"Professor."
"Hm?"
"If I design a condition that is relatively easy to accept only for someone who truly believes in his own judgment, would not that allow me to transfer the screening cost to the other party?"
The professor leaned back in his chair, watching the smile gradually appear on her face.
"Theoretically yes. However, your interest in this problem today seems much higher than during class."
Satsuki blinked.
"Is not it even more interesting when economics is used to solve real-world problems?"
"If this sentence came out of the mouth of an ordinary student, I would probably be very gratified."
The professor glanced at the few pages of paper on the desk, then looked up at her.
"But coming from the mouth of Saionji-san, I would be rather worried about which company will have bad luck tomorrow because of my class."
Satsuki could not help laughing.
"Rest assured, Professor."
She closed her notebook and picked up the bag placed aside.
"If someone really has bad luck, that just proves he did not pass the screening."