Bar-Isaac, Heski; Shapiro, Joel - In: American Economic Review 101 (2011) 3, pp. 120-24
The financial crisis has brought a new focus on the accuracy of credit rating agencies (CRAs). In this paper, we highlight the incentives of analysts at the CRAs to provide accurate ratings. We construct a model in which analysts initially work at a CRA and can then either remain or move to a...