{"title":"Monitor Reputation and Transparency","authors":"I. Marinovic, M. Szydlowski","doi":"10.2139/ssrn.3703870","DOIUrl":null,"url":null,"abstract":"We study the disclosure policy of a regulator overseeing a monitor with reputation concerns. The monitor faces a manager, who chooses how much to manipulate based on the monitor’s reputation. Reputational incentives are strongest for intermediate reputations. Instead of providing transparency, the regulator’s disclosure policy aims to keep the monitor’s reputation intermediate, even at the cost of diminished incentives. Beneficial schemes feature random delay or noisy information. Schemes that feature verifiable disclosure destroy reputational incentives. The regulator discloses more aggressively when she has better enforcement tools. (JEL D82, D83, G21, G28, G38, M42)","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"23 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2020-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"9","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Regulation of Financial Institutions eJournal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.3703870","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 9
Abstract
We study the disclosure policy of a regulator overseeing a monitor with reputation concerns. The monitor faces a manager, who chooses how much to manipulate based on the monitor’s reputation. Reputational incentives are strongest for intermediate reputations. Instead of providing transparency, the regulator’s disclosure policy aims to keep the monitor’s reputation intermediate, even at the cost of diminished incentives. Beneficial schemes feature random delay or noisy information. Schemes that feature verifiable disclosure destroy reputational incentives. The regulator discloses more aggressively when she has better enforcement tools. (JEL D82, D83, G21, G28, G38, M42)