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We propose a model with incomplete information where a distressed bank asks its creditor, a healthy bank, to reduce its debt. Given the information disclosed by the regulator about the asset quality of the distressed bank and its possible bailout by the government, the healthy bank can accept or...
Persistent link: https://www.econbiz.de/10013248510
We study the impact of pre-contractual communication on market outcomes when economic relationships are subject to … (first movers) prior to entering the credit relationship. Communication reduces moral hazard (strategic default) and … weaker impact of communication. Borrowers are more likely to renege on repayment promises when they can hide opportunistic …
Persistent link: https://www.econbiz.de/10014301388
other hand the decision makers rely too much on the received information. Moreover, communication as well as payoffs … communication is less biased. In all treatments, however, the messages are more precise than theoretically predicted. …
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We consider a Sender-Receiver game in which the Sender can choose between sending a cheap-talk message, which is costless, but also not verified and a costly verified message. While the Sender knows the true state of the world, the Receiver does not have this information, but has to choose an...
Persistent link: https://www.econbiz.de/10011576182
We study experimentally persuasion games in which a sender (e.g., a seller) with private information provides verifiable but potentially vague information (e.g., about the quality of a product) to a receiver (e.g., a buyer). Various theoretical solution concepts such as sequential equilibrium or...
Persistent link: https://www.econbiz.de/10011811807
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When groups face difficult problems, the voices of experts may be lost in the noise of others' contributions. We present results from a "naturally noisy" setting, a large first-year undergraduate class, in which the expert's voice was "lost" to such a degree that bringing forward even more...
Persistent link: https://www.econbiz.de/10012432144
This paper investigates how different message structures impact communication strategy as well as sender and receiver … behavior. Specifically, we focus on comparing communication games with messages stating an intention versus a request. Our …
Persistent link: https://www.econbiz.de/10012432600