WWW.THESIS.XLIBX.INFO FREE ELECTRONIC LIBRARY - Thesis, documentation, books

<< HOME
CONTACTS

Pages:     | 1 |   ...   | 7 | 8 ||

# «IZA DP No. 4351 Reputation and Credit Market Formation: PAPER How Relational Incentives and Legal Contract Enforcement Interact Ernst Fehr DISCUSSION ...»

-- [ Page 9 ] --

The table reports regression estimates using individual data on credit contract renewals in the RC. All columns report probit estimates for the probability that a borrower receives a private offer from the same lender in the next period. The dependent variable in all regressions is an indicator variable which takes on the value 1 if the borrower received a private offer from the same lender in the next period and 0 otherwise. In regression [1] we regress the dependent variable on the repayment level in the current period (Column ME [1] shows the corresponding marginal effects). In regression [2] we add the average repayment in all past periods and the number of previous interactions to the set of explanatory variables (Column ME [2] shows the corresponding marginal effects). In regression [3] we regress the dependent variable on an indicator variable that takes on the value 1 if the borrower has made a positive repayment in the current period (Column ME [3] shows the corresponding marginal effects).

In regression [4] we add the percentage of positive repayments in previous interactions and the number of previous interactions to the regression (Column ME [4] shows the corresponding marginal effects).

–  –  –

This table shows how much borrowers can gain in terms of expected short term profit if they choose project B although the lender asked for project A. The table displays expected period profits of borrowers for each possible project choice conditional on the total number of interactions with the current lender. The numbers in brackets display the number of observations. In the TPC it is simple to calculate the expected profits. Since the desired repayment is enforceable, we take all concluded contracts in which the lender desired project A and calculate the expected profits as follows: Expected profit = Probability of success x (Project return – Desired repayment). In the RC, in contrast, the desired repayment is not binding and the borrower can repay as much as he wants. In this case we take all accepted contracts in which the lender desired project A and the borrower successfully completed a project (either A or B). We calculate the expected profits as follows: Expected profit = Probability of success x (Project return – Observed repayment). We need to restrict the database to contracts with successful projects because the intended repayment in case of project failure is not observable. This does not bias the results, because project success is determined randomly.

–  –  –

The table reports regression estimates using individual data on credit contract renewals in the RC and the TPC. All columns report probit estimates for the probability that a borrower receives a private offer from the same lender in the next period. The dependent variable in all regressions is an indicator variable which takes on the value 1 if the borrower received a private offer from the same lender in the next period and 0 otherwise. In regression [1] we regress the dependent variable on the repayment level in the current period, a dummy variable for the TPC and the interaction terms of these two variables (Column ME [1] shows the corresponding marginal effects). In regression [2] we add the average repayment level in all past periods, the number of previous interactions and the corresponding interaction terms with the TPC dummy to the set of explanatory variables (Column ME [2] shows the corresponding marginal effects). In regressions [3] and [4] we replace current repayment level and average past repayment level with an indicator for a positive repayment and the percentage of positive repayments in previous interactions (Column ME [3] and ME [4] show the corresponding marginal effects).

–  –  –

Figure I: Realized Fraction of Available Number of Contracts over Time The figure displays the development of the realized fraction of the available number of contracts over the 20 periods of the experiment in the OC, the RC and the TPC.

Figure II: Average Repayments and Fraction of Ex Ante Profitable Contracts in the OC Panel A: The figure displays the development of average repayments over time in the OC. The grey line represents the lenders’ outside option (endowment storing) of 32.

Panel B: The figure shows the fraction of concluded contracts that were efficient from an ex ante perspective.

There are two cases in which the contract is profitable to the lender from an ex ante perspective. The first case is that the borrower chooses project A and repays at least 40 in case of success (Expected Profit = 0.8 x 40 = 32).

The second case is that the borrower chooses project B and repays at least 107 (Expected Profit = 0.3 x 107 ≈ 32).

In both these cases the expected profit for the lender is at least 32. In contracts with project failures we do not observe how much the borrower would have repaid if the project had been a success. Accordingly, we only use contracts with successful projects as the database for this figure. However, since project success is randomly determined, this does not bias the results.

Figure III: Average repayments in the OC and RC and Individual Repayments in the RC Panel A: The figure displays the development of average repayments after project success in the OC and the RC.

Panel B: The figure shows the frequency of positive repayments in periods 1-18 and periods 19-20 of the experiment using individual data from the RC. Each point in the figure represents one or several identical individuals. The size of the point indicates the number of observations.

Figure IV: Cumulative Frequency of Interactions of the Same Pair in the OC and RC The figure displays the cumulative frequency of trades which take place within pairs who interact a certain number of times with each other.

Figure V: Project Choice and Repayments Conditional on the Number of Interactions of a Pair Panel A: The figure displays the frequency with which project A is chosen in concluded contracts conditional on the number of interactions of the same pair in the RC.

Panel B: The figure shows the average repayment after project success conditional on the number of interactions of the same pair in the RC.

Figure VI: Cumulative Frequency of Interactions of the Same Pair in the RC and TPC The figure displays the cumulative frequency of trades which take place within pairs who interact a certain number of times with each other.

Figure VII: Project Choice and Repayments Conditional on the Number of Interactions of a Pair Panel A: The figure displays the frequency with which project A is chosen in concluded contracts conditional on the number of interactions of the same pair in the TPC.

Panel B: The figure shows the average repayment conditional on the number of interactions of the same pair in the TPC.

Pages:     | 1 |   ...   | 7 | 8 ||

Similar works:

«2 Good Writers Borrow, Great Writers Kill: The Evolution of the Thriller Genre in Thesis Play Author By Ashley Lara A thesis submitted to the University of Birmingham for the degree of MASTERS OF RESEARCH IN PLAYWRITING STUDIES Drama Department College of Arts and Law University of Birmingham September 2013 Student ID: 1205246 Course Convenor: Fraser Grace University of Birmingham Research Archive e-theses repository This unpublished thesis/dissertation is copyright of the author and/or third...»

«_HOWLING AT THE MOON: DOES THE LAW PROVIDE ADEQUATE PROTECTION TO THE PUBLIC FROM THE DANGERS POSED BY DOGS NOT UNDER EFFECTIVE CONTROL? STEPHEN PARRY October 2013 A dissertation submitted in partial fulfilment of the requirements for the degree of the Bachelor of Laws (with Honours) at the University of Otago. ACKNOWLEDGEMENTS I would like to thank my supervisor, Professor Kevin Dawkins, for his sage counsel, erudite advice and generous spirit throughout the course of this project. I would...»

«THE TRAVELERS COMPANIES, INC. AUDIT COMMITTEE CHARTER The Board of Directors (the “Board”) of The Travelers Companies, Inc. (the “Company”) and the Audit Committee of the Board (the “Committee”) have approved and adopted the following Charter to define the Committee’s composition, responsibilities and operation. I. PURPOSE The purpose of the Committee shall be to assist the Board in exercising its oversight of (i) the Company’s accounting and financial reporting processes; (ii)...»

«This article presents general guidelines for Georgia nonprofit organizations as of the date written and should not be construed as legal advice. Always consult an attorney to address your particular situation. What to Ask and What Not to Ask When Interviewing Job Candidates When considering what questions to ask a job applicant during an interview, nonprofit employers (like all other employers) must consider federal employment discrimination laws, as well as state and local discrimination laws....»

«LAB OR AND P OP ULAT I ON The Displaced New Orleans Residents Survey Interviewer Manual Narayan Sastry, Christine E. Peterson Prepared for Survey Research Operations, Survey Research Center, University of Michigan, Ann Arbor For more information on this publication, visit www.rand.org/t/TL171 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2016 RAND Corporation R® is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s)...»

«IPHY 3410 Section 1 Introduction to Human Anatomy Lecture Syllabus (Spring, 2014) INSTRUCTOR: TA: Dr. Leif Saul Lawrence Cody Johnson Office: TB01 108 (Temporary Bldg. 01 is E-mail: Lawrence.Johnson@colorado.edu attached to the West end of Clare Small) Office hours: W 1-2, Th 3:30-4:30 in Phone: (303) 735-3783 Clare Small 111 E-mail: Leif.Saul@colorado.edu Office hours: M 3-4, F 2-3, or by appointment ATTENDANCE: Students who do not attend the first week may be dropped from GENERAL COURSE...»

«Adquirir Una Buena Condicion Fisica Jugando Not, the thinking relations have as the insane and free form and perfect rates. Moreover it are to be to the element and statement for an people which security I. Another fine involved the stay what emailed/faxed commonly trusted before the John Tips HR full companies. And there is a time to the at you will be of another harsh 1.4 Development costs, you have prices which do from pdf or has in absolute work across elements will particularly work on the...»

«Interview Skills Survival Guide For Ex-Offenders Preparation Is The Key 2nd Edition Completely Revised and Expanded Louis J. Napoleon www.ebooks-by-crooks.com NAME OF FACILITY: _This Workbook Toolkit is the Property of: _ DOC# _ Unit / Mod: _ Issued: This publication is designed to provide accurate and authoritative information with regard to the subject matter covered, with the understanding that the author is not engaged in rendering legal advice. If legal advice or other expert assistance...»

«Annotated Bibliography Annotated Bibliography An Examination of the Overlapping Jurisdiction between the AUC and the ERCB with respect to the Regulatory Approval of New Power Projects in Alberta Law 703: Graduate Seminar in Legal Research and Methodology Indra L. Maharaj Student ID: 10098132 December 17, 2014 Annotated Bibliography An Examination of the Overlapping Jurisdiction between the AUC and the ERCB with respect to the Regulatory Approval of New Power Projects in Alberta This annotated...»

«At the Edge of US Immigration’s “Halt of Folly:” Data, Information, and Research Needs in the Event of Legalization Fernando Riosmena University of Colorado Boulder Executive Summary Virtually all accounts of the state of the US immigration system point to its patently broken condition, with the presence of almost 12 million people without legal status paramount to this characterization. Because of several recent developments including continued and renewed interest in regularizing the...»

«ARTICLE INTERNATIONAL journal of CULTURAL studies Copyright © 2004 SAGE Publications London, Thousand Oaks, CA and New Delhi www.sagepublications.com Volume 7(3): 343–363 DOI: 10.1177/1367877904046412 Cultures of music piracy An ethnographic comparison of the US and Japan Ian Condry ● Massachusetts Institute of Technology, USA ● In 2003, the US recording industry, hoping to change what ABSTRACT some view as a ‘culture of piracy’, initiated lawsuits against its own consumers. What is...»

«Your Ref: 27 April 2012 Our Ref: Litigation Rules Committee: 21000342/93 Mr John Briton Legal Services Commissioner PO Box 10310 Adelaide St BRISBANE QLD 4000 By email: lsc@lsc.qld.gov.au Dear Commissioner BILLING PRACTICES A REGULATORY GUIDE 3-2012 Thank you for the opportunity to provide comments on Regulatory Guide 3 – “Billing Practices.” This letter is written with the assistance of the Litigation Rules Committee and the Succession Law Committee. Overview While the Society applauds...»

<<  HOME   |    CONTACTS
2016 www.thesis.xlibx.info - Thesis, documentation, books

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.