Experimenting with career concerns
By: Halac, Marina and Kremer, Ltan
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Material type: 
BookPublisher: American Economic Journal: Microeconomics Description: 12(1), Feb, 2020: p.260-288.Subject(s): Banks; Depository Institutions; Micro Finance Institutions; Mortgages
In:
American Economic Journal: MicroeconomicsSummary: A manager who learns privately about a project over time may want to delay quitting it if recognizing failure/lack of success hurts his reputation. In the banking industry, managers may want to roll over bad loans. How do distortions depend on expected project quality? What are the effects of releasing public information about quality? A key feature of banks is that managers learn about project quality from bad news, i.e., a default. We show that in such an environment, distortions tend to increase with expected quality and imperfect information about quality. Results differ if managers instead learn from good news.- Reproduced
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Articles
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Indian Institute of Public Administration | 12(1), Feb, 2020: p.260-288 | Available | AR123431 |
A manager who learns privately about a project over time may want to delay quitting it if recognizing failure/lack of success hurts his reputation. In the banking industry, managers may want to roll over bad loans. How do distortions depend on expected project quality? What are the effects of releasing public information about quality? A key feature of banks is that managers learn about project quality from bad news, i.e., a default. We show that in such an environment, distortions tend to increase with expected quality and imperfect information about quality. Results differ if managers instead learn from good news.- Reproduced
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