Fragility of reputation and clustering of risk-taking

Guillermo L. Ordoñez

Reputation concerns in credit markets restrain borrowers' temptations to take excessive risk. The strength of these concerns depends on the behavior of other borrowers, rendering the reputational discipline fragile and subject to breakdowns without obvious changes in economic fundamentals. Furthermore, at an aggregate level, breakdowns are clustered among borrowers with intermediate and good reputations, magnifying otherwise small economic shocks.

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Year of publication:	September 2013
Authors:	Ordoñez, Guillermo
Published in:	Theoretical economics : TE ; an open access journal in economic theory. - Toronto : [Verlag nicht ermittelbar], ISSN 1555-7561, ZDB-ID 2220447-7. - Vol. 8.2013, 3, p. 653-700
Subject:	Reputation \| global games \| risk-taking \| fragility \| Risikopräferenz \| Risk attitude \| Spieltheorie \| Game theory \| Firmenimage \| Corporate reputation \| Risiko \| Risk \| Bankrisiko \| Bank risk \| Regionales Cluster \| Regional cluster

Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.3982/TE1207 [DOI] 10.3982/TE1648 [DOI] hdl:10419/150204 [Handle]
Classification:	D82 - Asymmetric and Private Information ; E44 - Financial Markets and the Macroeconomy ; G01 - Financial Crises ; G32 - Financing Policy; Capital and Ownership Structure
Source:	ECONIS - Online Catalogue of the ZBW

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