Online ratings play an important role in many markets. We study the often disputed information content of these ratings, by proposing a reduced-form Bayesian model of the typical buyer's rating decision. Our empirical evidence based on eBay raw data is in line with even intricate predictions...

We develop a theory of collective brand reputation for markets in which product quality is jointly determined by local and global players. In a repeated game of imperfect public monitoring, we model collective branding as an aggregation of quality signals generated in different markets. Such...

Companies are under increasing pressure to manage their reputation on environmental, social, and governance (ESG) issues. Auditors are a potential source of ESG risk management expertise and assurance due to a deep understanding of their client’s ESG-related reputation risk (“ESG risk”)...

This paper presents a continuous-time model of sovereign debt. In it, a relatively impatient sovereign government's hidden type switches back and forth between a commitment type, which cannot default, and an optimizing type, which can default at any time, and assume outside lenders have...

Previous models of rules versus discretion are extended to include uncertainty about the policymaker's "type." When people observe low inflation, they raise the possibility that the policymaker is committed to low inflation (type 1). This enhancement of reputation gives the uncommitted...

Information affecting a candidate's reputation might have significant electoral consequences. Do candidates respond to the release of information? Using Brazilian elections and audits as an exogenous source of information, I show that both incumbent and challenger increase their campaign...

Paul Argenti and Ryan Calsbeek of Dartmouth explain that corporations should focus not on their rankings, but on the attributes that influence those rankings. They combine evolutionary biology and corporate reputation research to determine what makes a company the best that it can be, arguing...

This paper proposes a theoretical model to analyse the effect of competition on the quality of the certification process offered by stock exchanges. If the stock exchange truthfully certifies the quality of a new issue, then it would list only the good projects, which would alleviate information...

This paper examines the impact of competition on the investment behavior and outcomes of venture capital (VC) firms with differing reputations. Following the introduction of investor tax credit programs that increase competition, reputable VCs decrease the number and size of their investments....

The mining industry, particularly coal, has always been known for its negative effects to the environment. The implementation of good mining practices by a number of mining industries seem unable to deter this opinion. The negative public opinion has a significant impact on the reputation of...

How customers develop purchase intentions in online shopping has been an area of recent interest. In this study, we ask whether males and females leverage trust into and perceived reputation of online retailers differently in reporting purchase intentions. Drawing on the literature on...

This paper studies whether countries benefit from servicing their debts during times of widespread sovereign defaults. Colombia is typically regarded as the only large Latin American country that did not default in the 1980s. Using archival research and formal econometric estimates of Colombia's...

This paper studies whether countries benefit from servicing their debts during times of widespread sovereign defaults. Colombia is typically regarded as the only large Latin American country that did not default in the 1980s. Using archival research and formal econometric estimates of Colombia's...

Information affecting a candidate's reputation might have significant electoral consequences. Do candidates respond to the release of information? Using Brazilian elections and audits as an exogenous source of information, I show that both incumbent and challenger increase their campaign...

This paper investigates whether firms’ responsiveness to customer reviews affects firms’ online reputation. Responsiveness is measured by the intensity (fraction) of reviews that are responded to whereas online reputation is measured using TripAdvisor’s average customer review rating (1-5...

Although tax policy in most historical cases has been barely distinguishable from legalized theft, why have tax and spending policies in a few unusually fortunate communities, such as some of the modern democracies, apparently been, if not welfare maximizing, at least relatively benevolent? We...

The study examines the relationship between brand image, brand reputation, brand goodwill, and sustainable firm performance (FP). The purpose was to examine the psychological effect of brand image and brand reputation on sustainable FP of Indonesian logistics companies. This was achieved using...

History suggests the following stylized facts about default on sovereign debt:(1) Defaults are associated with identifiably bad states of the world. (2) Defaults are usually partial, rather than complete.(3) Sovereign states usually are able to borrow again soon after a default. Motivated by...

Leveraged buyouts allow for a separate identification of sponsor reputation and underlying firm quality and their effects on capital structure choices. In 616 U.S. LBOs for which we can reconstruct financing activity, we find that the average LBO issues an average of 1.16 additional debt...

Profits show the performance of managers before the related parties, such as investors and creditors. Therefore, managers often incorrectly state them in the published annual financial reports to protect their reputation. Undoubtedly, this action needs to be reduced by the governance mechanism,...

We study the role of competition in customers' reactions to litigation against firms, using anonymized mobile phone location data. A class action lawsuit filing results in a 4% average reduction in customer visits to target firms' outlets in the following months. The effect strongly depends on...

We investigate how a firm’s auditor choice is influenced by an exogenous change in the reputation of its industry peers’ auditors. Using Big N auditors’ acquisitions of non-Big N auditors as a setting that exogenously changes the auditor reputation of the acquired non-Big Ns’ clients...

Alternative credentials offer a partial solution to the skill gap and student debt crises, supernormal returns for some students, and a tool to support diversity hiring for firms. This paper tests the hypothesis that educational prestige explains hirability better than accreditation. An original...

Consumers benefit from reading ratings online before making their purchases, yet this information aggregation process may have some potential problems that was not previously credited in the literature. Through an empirical approach, I showed how people could review businesses inconsistently...

We examine the joint effect of average default risk and uncertainty on behavior of rating agencies. We find when average default risk rises in the economy standards weaken but a simultaneous increase in uncertainty’ causes the standards to tighten more. The net effect is the documented...

This paper analyzes a reputational equilibrium for inflation under the generic assumption that monetary policy reflects proximate preferences for low expected inflation and positive unexpected inflation. The paper stresses the qualitative implication that in a reputational equilibrium the...

Much recent research in the economics of information has analyzed the implications of alternative market structures in the presence of qualitative characteristics which cannot be accurately and objectively measured or described. This approach avoids the more basic question of the influence of...

This study investigates the development and sustainability of a firm’s IT capability reputation from an IT executive’s standpoint. Building on institutional theory, we argue that IT executives will try to achieve external legitimacy - i.e., project an image of superior IT capability to...

Misconduct – market actions that are unethical and indicative of fraud or wrongdoing – is a significant yet poorly understood issue that underlies many economic and financial transactions. Does misconduct in markets matter? When and how does reputation act as a discipline against seller...

Taken the cancellation of the upper limit of loan interest rates as a quasinatural experiment and based on the signal theory of auditor demand, this paper investigates how the improvement of credit availability affects the choice of auditors. Results show that, compared with low-risk...

In the aftermath of a school shooting in Florida, the New York State bank regulator urged banks to manage the “reputation risk” posed by doing business with the National Rifle Association (a gun rights advocacy group). As part of Operation Choke Point, a federal regulator told banks to end...

This paper analyses how reputational shocks and regulatory reforms have affected the value-relevant information content of rating adjustments announced by the main Credit Rating Agencies (CRAs). We analyse the U.S. stock market at the firm level. Our novel empirical findings show the inverse...

“Envelopegate” is a term coined by social media users to describe PwC's non-audit service failure that occurred during the 2017 Academy Awards ceremony, where a PwC partner provided the wrong envelope to the presenter for the “Best Picture” award. For PwC, the error was a regrettable...

This study examines whether boards of directors use external auditing to protect their reputation capital. We hypothesize and find that audit quality increases with the level of directors' reputation capital. More specifically, using ten-year panel data on Finnish listed companies, we find that...

We study whether commonality of incentives and opportunity to commit fraud triggers reputational contagion from culpable firms to nonculpable firms. Relying on a sample of 30 banks involved in fixing the London Interbank Offered Rate (LIBOR) and a control sample of 30 banks, we find that banks'...

We examine how constraints on directors' availability to serve on boards influence their labor market outcomes. We find that directors who lose (or leave) a board are more likely to subsequently gain a new board seat, regardless of their performance on the departed board, suggesting that...

How do changes in a rating agency's reputation affect the ratings market? We study the dynamics of credit ratings after Standard & Poor's (S&P) was shut out of a large segment of the commercialmortgage-backed securities (CMBS) ratings market following a procedural mistake. Exploiting the fact...