Reputational Herding: How Difficult the Problem is Matters
Date Issued
2006
Date
2006
Author(s)
Chang, Chih-Wei
DOI
en-US
Abstract
In this thesis, we offer a new interpretation of“sharing-the-blame”effect.If the public is uncertain about how difficult managers’decision problems are, managers share the blame when many of them make mistakes in the same investment decision because this decision problem seems more difficult. This effect gives each manager an incentive to mimic other managers’decisions. We show that“sharing-the-blame”effect causes herding behaviors if capable managers have an information advantage in relatively simple problems. However, if capable managers have an information advantage in relatively difficult problems, herding behaviors no longer occurs.
Subjects
聲譽考量
Reputational Herding
Sharing-the-blame effect
Type
thesis
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