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Experimenting with career concerns
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Halac, Marina and Kremer, Ilan (2020) Experimenting with career concerns. American Economic Journal: Microeconomics, 12 (1). pp. 260-288. doi:10.1257/mic.20170411 ISSN 1945-7669.
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Official URL: https://doi.org/10.1257/mic.20170411
Abstract
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 they 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.
Item Type: | Journal Article | ||||||
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Subjects: | H Social Sciences > HG Finance | ||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||
Library of Congress Subject Headings (LCSH): | Banks and banking, Default (Finance) | ||||||
Journal or Publication Title: | American Economic Journal: Microeconomics | ||||||
Publisher: | American Economic Association | ||||||
ISSN: | 1945-7669 | ||||||
Official Date: | February 2020 | ||||||
Dates: |
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Volume: | 12 | ||||||
Number: | 1 | ||||||
Page Range: | pp. 260-288 | ||||||
DOI: | 10.1257/mic.20170411 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Reuse Statement (publisher, data, author rights): | Copyright © 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 by the American Economic Association. Permission to make digital or hard copies of part or all of American Economic Association publications for personal or classroom use is granted without fee provided that copies are not distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation, including the name of the author. Copyrights for components of this work owned by others than AEA must be honored. Abstracting with credit is permitted. The author has the right to republish, post on servers, redistribute to lists and use any component of this work in other works. For others to do so requires prior specific permission and/or a fee. Permissions may be requested from the American Economic Association Administrative Office by going to the Contact Us form and choosing "Copyright/Permissions Request" from the menu. Copyright © 2019 AEA | ||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||
Date of first compliant deposit: | 30 May 2019 | ||||||
Date of first compliant Open Access: | 4 June 2019 | ||||||
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