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dc.contributor.authorFehr, Ernsten_US
dc.contributor.authorZehnder, Christianen_US
dc.date.accessioned2009-11-04en_US
dc.date.accessioned2010-07-07T12:03:36Z-
dc.date.available2010-07-07T12:03:36Z-
dc.date.issued2009en_US
dc.identifier.piurn:nbn:de:101:1-2009092293en_US
dc.identifier.urihttp://hdl.handle.net/10419/35871-
dc.description.abstractThe evidence suggests that relational contracting and legal rules play an important role in credit markets but on the basis of the prevailing field data it is difficult to pin down their causal impact. Here we show experimentally that relational incentives are a powerful causal determinant for the existence and performance of credit markets. In fact, in the absence of legal enforcement and reputation formation opportunities the credit market breaks down almost completely while if reputation formation is possible a stable credit market emerges even in the absence of legal enforcement of debt repayment. Introducing legal enforcement of repayments causes a further significant increase in credit market trading but has only a surprisingly small impact on overall efficiency. The reason is that legal enforcement of debt repayments weakens relational incentives and exacerbates another moral hazard problem in credit markets the choice of inefficient high-risk projects.en_US
dc.language.isoengen_US
dc.publisherForschungsinst. zur Zukunft der Arbeit Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 4351en_US
dc.subject.jelC91en_US
dc.subject.jelG21en_US
dc.subject.jelG28en_US
dc.subject.jelL14en_US
dc.subject.ddc330en_US
dc.subject.keywordCredit marketsen_US
dc.subject.keywordrelationship lendingen_US
dc.subject.keywordreputation formationen_US
dc.subject.keywordlegal enforcementen_US
dc.subject.stwKreditmarkten_US
dc.subject.stwLieferanten-Kunden-Beziehungen_US
dc.subject.stwPrestigeen_US
dc.subject.stwSchuldrechten_US
dc.subject.stwRechtsdurchsetzungen_US
dc.subject.stw├ľkonomischer Anreizen_US
dc.subject.stwTheorieen_US
dc.titleReputation and credit market formation: how relational incentives and legal contract enforcement interacten_US
dc.typeWorking Paperen_US
dc.identifier.ppn610223453en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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