This paper presents a theoretical framework to describe the behaviour of the credit rating agencies(CRAs) during the crisis, surveying some reputational game models. CRAs have been blamed of inflating ratings of the new credit risk transfer products (CRTs) and of acting in favour of issuers...

In a model of repeated games, we determine the conditions under which cooperation is an equilibrium outcome among the G-20 countries. We consider first, that members are uncertain about the lifespan of the G-20. Second, the nature of member countries and their interrelations can change because...

We analyze the effects of CEOs' layoff risk on their risk choice while overseeing a firm. A CEO, whose managerial ability is unknown, is fired if her expected ability is below average. Her risk choice changes the informativeness of output and market's belief about her ability. She can decrease...

One of the main obstacles for successful economic development is the formation of institutional traps, inefficient yet stable norms of behaviour. Domination of barter exchange, arrears, corruption and black market activities are examples of institutional traps that have hampered reforms in...

The appearance of the Internet reduces transaction costs greatly, and brings the boom of online markets. While we are trying to regard it as the most realistic approximation of perfect competition market, the asymmetric information and a series of problems caused by it stop us from dreaming. As...

Purpose In enhancing the market operation of the building sector, transparency is of great importance. The objective of this article is to propose an inventory of aspects of the relationships between public clients and executing parties that have the most urgent need for greater transparency....

In November 2001, a TV program showed that many large Dutch construction companies participated in price fixing. We analyze how one such company, Heijmans, reacted to the reputation crises after the TV program by introducing a code of conduct. We present the outcomes of a questionnaire survey...

Any legislative framework is likely to generate different institutions or norms of behavior which the legislator occasionally could have never foreseen. I suggested a general pattern, on which inefficient, if stable, norms or institutions called institutional traps would form.

This paper uses data collected from eBay's website to identify why buyers fail to leave (negative) feedback in online markets. Empirical results con¯rm that the fear of retaliation may be an important motivation for buyers not to leave (negative) feedback, while the time and effort cost of...