In this paper, bankster reputation as a coordination mechanism (“focal arbitrator”) in the game of interest rate manipulation and the effects of punishment will be analyzed with the aid of game-theoretical instruments. In such a game with multiple equilibria, the “bad” to-manipulate equilibrium arises because of “bankster expectations”. Under this condition, the game can, in the short term, only be changed through penalties so that the not-to-manipulate strategy becomes the dominant one. Should it happen that the bankster reputation be destroyed in the long term, penalties would, once again, become superfluous, because the “good” not-to-manipulate equilibrium would appear even in self-interested actions, due to the good banker expectations.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 1) |
| DOI | 10.11648/j.ijefm.20130101.13 |
| Page(s) | 21-24 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2013. Published by Science Publishing Group |
LIBOR, Interest Rate Manipulation, Game Theory, Focal Point, Banksters
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APA Style
Andreas Haaker. (2013). To Manipulate or Not to Manipulate – A Short Comment on the Game of Interest Rate Manipulation. International Journal of Economics, Finance and Management Sciences, 1(1), 21-24. https://doi.org/10.11648/j.ijefm.20130101.13
ACS Style
Andreas Haaker. To Manipulate or Not to Manipulate – A Short Comment on the Game of Interest Rate Manipulation. Int. J. Econ. Finance Manag. Sci. 2013, 1(1), 21-24. doi: 10.11648/j.ijefm.20130101.13
AMA Style
Andreas Haaker. To Manipulate or Not to Manipulate – A Short Comment on the Game of Interest Rate Manipulation. Int J Econ Finance Manag Sci. 2013;1(1):21-24. doi: 10.11648/j.ijefm.20130101.13
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Download@article{10.11648/j.ijefm.20130101.13,
author = {Andreas Haaker},
title = {To Manipulate or Not to Manipulate – A Short Comment on the Game of Interest Rate Manipulation},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {1},
number = {1},
pages = {21-24},
doi = {10.11648/j.ijefm.20130101.13},
url = {https://doi.org/10.11648/j.ijefm.20130101.13},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130101.13},
abstract = {In this paper, bankster reputation as a coordination mechanism (“focal arbitrator”) in the game of interest rate manipulation and the effects of punishment will be analyzed with the aid of game-theoretical instruments. In such a game with multiple equilibria, the “bad” to-manipulate equilibrium arises because of “bankster expectations”. Under this condition, the game can, in the short term, only be changed through penalties so that the not-to-manipulate strategy becomes the dominant one. Should it happen that the bankster reputation be destroyed in the long term, penalties would, once again, become superfluous, because the “good” not-to-manipulate equilibrium would appear even in self-interested actions, due to the good banker expectations.},
year = {2013}
}
TY - JOUR T1 - To Manipulate or Not to Manipulate – A Short Comment on the Game of Interest Rate Manipulation AU - Andreas Haaker Y1 - 2013/02/20 PY - 2013 N1 - https://doi.org/10.11648/j.ijefm.20130101.13 DO - 10.11648/j.ijefm.20130101.13 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 21 EP - 24 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20130101.13 AB - In this paper, bankster reputation as a coordination mechanism (“focal arbitrator”) in the game of interest rate manipulation and the effects of punishment will be analyzed with the aid of game-theoretical instruments. In such a game with multiple equilibria, the “bad” to-manipulate equilibrium arises because of “bankster expectations”. Under this condition, the game can, in the short term, only be changed through penalties so that the not-to-manipulate strategy becomes the dominant one. Should it happen that the bankster reputation be destroyed in the long term, penalties would, once again, become superfluous, because the “good” not-to-manipulate equilibrium would appear even in self-interested actions, due to the good banker expectations. VL - 1 IS - 1 ER -
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