 A quantum derivation of a reputational risk premiumJuan Pineiro-Chousa and Marcos Vizcaíno-González International Review of Financial Analysis, 2016, vol. 47, issue C, 304-309 Abstract: Using quantum modeling, we propose a novel approach to reputational risk management arguing that taking care of corporate reputation can be considered a coalitional strategy framed into a quantum game theory schema. Following a stochastic mechanics approach, and assuming that the revenues of a firm can be modeled as an Ornstein–Uhlenbeck process represented by the well-known Langevin equation for the diffusion of a particle with unit mass under non-linear friction, we offer a mathematical derivation for the discount rate of a firm that does not manage its reputational risk and for a company that optimally manages its reputational risk. By comparison, we derive an analytical expression for the reputational risk premium. Our approach provides useful managerial and financial implications, suggesting that the use of the quantum ideology may result useful in enlarging the body of knowledge of corporate management. Keywords: Econophysics; Quantum finance; Stochastic mechanics; Langevin equation; Reputational risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:47:y:2016:i:c:p:304-309 DOI: 10.1016/j.irfa.2016.01.003 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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