Memory in Contracts: The Experience of the EBRD (1991-2003)

Lionel Artige () and Rosella Nicolini
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Lionel Artige: HEC-Department of Economics, Université de Liège.

Working Papers from Department of Applied Economics at Universitat Autonoma of Barcelona

Abstract: The objective of this paper is to identify the role of memory as a screening device in repeated contracts with asymmetric information in financial intermediation. We use an original dataset from the European Bank for Reconstruction and Development. We propose a simple empirical method to capture the role of memory using the client’s reputation. Our results unambiguously isolate the dominant effect of memory on the bank’s lending decisions over market factors in the case of established clients.

Keywords: Financial contract; Empirical contract theory; Reputation; Asymmetric (search for similar items in EconPapers)
JEL-codes: D21 D82 G21 L14 P21 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2010-03
New Economics Papers: this item is included in nep-cta
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https://ecap.uab.cat/RePEc/doc/wpdea1002.pdf (application/pdf)

Related works:
Working Paper: Memory in Contracts: The Experience of the EBRD (1991-2003) (2008)
Working Paper: Memory in Contracts: The experience of the EBRD (1991-2003) (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:uab:wprdea:wpdea1002

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