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Two-sided certification: The market for rating agencies
- Publication Year :
- 2010
- Publisher :
- Berlin: Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk, 2010.
-
Abstract
- Certifiers contribute to the sound functioning of markets by reducing a symmetric information. They, however, have been heavily criticized during the 2008-09 financial crisis. This paper investigates on which side of the market a monopolistic profit-maximizing certifier offers his service. If the seller demands a rating, the certifier announces the product quality publicly, whereas if the buyer requests a rating it remains his private information. The model shows that the certifier offers his service to sellers and buyers to maximize his own profit with a higher share from the sellers. Overall, certifiers increase welfare in specific markets. Revenue shifts due to the financial crisis are also explained.
- Subjects :
- Kreditwürdigkeit
Certification
ComputingMilieux_THECOMPUTINGPROFESSION
L15
G24
G14
Finanzdienstleistung
Lieferanten-Kunden-Beziehung
Wohlfahrtsanalyse
D82
Asymmetrische Information
Wohlfahrtseffekt
Ratingagentur
ddc:330
ComputingMilieux_COMPUTERSANDSOCIETY
Asymmetric Information
Certification, Rating Agencies, Asymmetric Information, Financial Markets
Lieferantenmanagement
Rating Agencies
Financial Markets
Monopol
Subjects
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.doi.dedup.....8b32775c62896908f258bbb4cd498677