Dataset Information

Incentive and constraint regulations of rating inflation in collusion over the separation of economic cycles - Markov rating shopping dual reputation model.

ABSTRACT: Economic cycles may lead to changes in corporate bond credit ratings. This paper utilizes the Markov model to describe transition probability matrixes of economic states for the separation of economic cycles. We develop a new model, which we term the Markov rating shopping dual reputation model, incorporating two reputation effects. This model is well suited to analyze the conditions of the dual rating incentive regulation and the constraint regulation for preventing rating inflation in collusion among credit rating agencies. Then, we apply the Markov regime switching-vector auto-regression (MS-VAR) to estimate the transition probability matrixes of America, England, Japan and China. Based on the numerical analysis and the simulations, the results show that a dual rating regulation can prevent the collusion of inflated ratings, as well as increased rating fees with the separation of economic cycles; additionally, when separating the economic cycles, a constraint regulation is more effective at reducing the risk of rating inflation in collusion and regulatory cost.

SUBMITTER: Zhou X

PROVIDER: S-EPMC6192634 | biostudies-literature | 2018

REPOSITORIES: biostudies-literature

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Incentive and constraint regulations of rating inflation in collusion over the separation of economic cycles - Markov rating shopping dual reputation model.

Zhou Xiangyun X Tian Yixiang Y Zhang Ping P Chen Xiurong X

PloS one 20181017 10

Economic cycles may lead to changes in corporate bond credit ratings. This paper utilizes the Markov model to describe transition probability matrixes of economic states for the separation of economic cycles. We develop a new model, which we term the Markov rating shopping dual reputation model, incorporating two reputation effects. This model is well suited to analyze the conditions of the dual rating incentive regulation and the constraint regulation for preventing rating inflation in collusio ...[more]

PMID: 30332467

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Project description:BACKGROUND:Virtual stores can be used to identify influences on consumer shopping behavior. Deception is one technique that may be used to attempt to increase the realism of virtual stores. OBJECTIVE:The objective of the experiment was to test whether the purchasing behavior of participants in a virtual shopping task varied based on whether they were told that they would receive the products they selected in a virtual convenience store (a form of deception) or not. METHODS:We recruited a US national sample of 402 adult current smokers by email from an online panel of survey participants. They completed a fully automated randomized virtual shopping experiment with a US $15 or US $20 budget in a Web-based virtual convenience store. We told a random half of participants that they would receive the products they chose in the virtual store or the cash equivalent (intervention condition), and the other random half simply to conduct a shopping task (control condition). We tested for differences in demographics, tobacco use behaviors, and in-store purchases (outcome variable, assessed by questionnaire) by experimental condition. RESULTS:The characteristics of the participants (398/402, 99.0% with complete data) were comparable across conditions except that the intervention group contained slightly more female participants (103/197, 52.3%) than the control group (84/201, 41.8%; P=.04). We did not find any other significant differences in any other demographic variables or tobacco use, or in virtual store shopping behaviors, including purchasing any tobacco (P=.44); purchasing cigarettes (P=.16), e-cigarettes (P=.54), cigars (P=.98), or smokeless tobacco (P=.72); amount spent overall (P=.63) or on tobacco (P=.66); percentage of budget spent overall (P=.84) or on tobacco (P=.74); number of total items (P=.64) and tobacco items purchased (P=.54); or total time spent in the store (P=.07). CONCLUSIONS:We found that telling participants that they will receive the products they select in a virtual store did not influence their purchases. This finding suggests that deception may not affect consumer behavior and, as a result, may not be necessary in virtual shopping experiments.

Dataset Information

Incentive and constraint regulations of rating inflation in collusion over the separation of economic cycles - Markov rating shopping dual reputation model.

Publications

Incentive and constraint regulations of rating inflation in collusion over the separation of economic cycles - Markov rating shopping dual reputation model.

Similar Datasets

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