Information and Debt Markets: Reputation, Financial         Intermediation and Optimal Maturity Structure
{'Code': '04050100', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Robin A. Cantor', 'PO_EMAI': None, 'PO_PHON': None}
This project makes a significant contribution to an increasingly                important line of research in financial economics.  It examines the             relationship between borrower and lender in the credit markets,                 specifically looking at the effects of information, particularly when           the borrower and lender have different information about each other.                                                                                            The important roles of financial institutions and the details of                financial contracts have only recently been addressed by economic               theory.  Past research has shown that the provisions of contracts have          virtually no effect on the real variables in an economy if both                 parties to the contract have all the information available.  This,              however, is not a realistic situation.  Typically, a lending                    institution such as a bank does not know as much about the borrower's           ability or inclination to repay a loan as the borrower does.  Thus              banks and other lending institutions face risk in making a loan.  That          risk is ameliorated as the bank accumulates more information about the          client.  For example, the bank can realistically be more certain that           a client who has a long history of repaying loans will repay the next           loan, than that a new client will repay the loan.  Reputation clearly           plays an important role in both the borrower's wish to acquire a loan           and in the lender's desire to let one.                                                                                                                          This project specifically analyzes the value of reputation to a                 borrower.  In a game theoretic framework Professor Diamond examines             how firms choose to accumulate investment capital, either through               loans or by selling stock directly to the public.  These decisions are          very important in that in the aggregate they have a great impact on             the financial sector, the availability of credit to other firms and             consumers, and the incentives for banks themselves to take risks.
{'FirstName': 'Douglas', 'LastName': 'Diamond', 'PI_MID_INIT': 'W', 'PI_SUFX_NAME': None, 'PI_FULL_NAME': 'Douglas W Diamond', 'EmailAddress': 'douglas.diamond@gsb.uchicago.edu', 'NSF_ID': '000308059', 'StartDate': '08/01/1987', 'EndDate': None, 'RoleCode': 'Principal Investigator'}
{'Name': 'Yale University', 'CityName': 'NEW HAVEN', 'ZipCode': '065113572', 'PhoneNumber': '2037854689', 'StreetAddress': '150 MUNSON ST', 'StreetAddress2': None, 'CountryName': 'United States', 'StateName': 'Connecticut', 'StateCode': 'CT', 'CONGRESSDISTRICT': '03', 'CONGRESS_DISTRICT_ORG': 'CT03', 'ORG_UEI_NUM': 'FL6GV84CKN57', 'ORG_LGL_BUS_NAME': 'YALE UNIV', 'ORG_PRNT_UEI_NUM': 'FL6GV84CKN57'}
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