Xu, R., X. Zhao, Z. Zheng——Actual Problems of Economics: Why Did Investment Banks Take More Risk Than Optimal? A Theoretical Analysis of Reasons for Subpri...
时间:2012-01-25
In this paper we build a game model to show that highpower compensation incentive, following strategies under information asymmetry and severe competition, and government's bailout policies and deregulation are the main reasons to tempt investment banks to take too much risk.Our work supports the empirical findings of R. Fahlenbrach & R.M. Stulz (2011) while refutes the conclusion of Alan Blinder(2009) that poor incentives were "one of the most fundamental causes"for the crisis.