Coordination of Interests and Bank Behavior
Grant-in-Aid for Scientific Research (C)
|Allocation Type||Single-year Grants|
Public finance/Monetary economics
|Research Institution||Hitotsubashi University|
MISUMI Takashi Hitotsubashi University, Graduate School of Commerce and Management, Associate Professor, 大学院・商学研究科, 助教授 (00229684)
|Project Period (FY)
2000 – 2001
Completed(Fiscal Year 2001)
|Budget Amount *help
¥1,500,000 (Direct Cost : ¥1,500,000)
Fiscal Year 2001 : ¥600,000 (Direct Cost : ¥600,000)
Fiscal Year 2000 : ¥900,000 (Direct Cost : ¥900,000)
|Keywords||behavioral economics / behavioral finance / prospect theory / mental accounting / bad loan problems / historical cost accounting / market value accounting / 企業救済 / 信認 / サンク・コスト|
Bank behavior is investigated by considering bank managements' preference explicitly, The main difference from existing research is that I consider bank managements as agents with various cognitive biases in making decision, not as homo economicus.
Standard economics has assumed that economic agents are rational and markets are efficient. However, there have been various empirical evidences that are inconsistent with this assumption. These studies, called 'behavioral economies' or 'behavioral finance,' apply achievement in cognitive psychology.
In this research project, I reviewed research in behavioral economics and behavioral finance, in which I considered the relationship between economics/finance and psychology.
Next, I considered 'bad loan problems,' the most serious economic problems in Japan, from behavioral economies' viewpoints. In this research, I considered the behavioral pattern of Japanese banks in the face of bad loan problems under the bank managements subject to prospect theory and mental accounting. In particular, I analyzed following issues ;
(1) Why do Japanese banks hesitate to disclose and liquidate their bad loans?
(2.). What is the impact of accounting standards - historical cost accounting vs. market value accounting - on writing-off of bad loans?
(3) Why is infusion of such a huge public funds useless in resolving bad loan problems?
I concluded that my model of bank behavior, which assumed biased bank managements, was very useful in considering Japan's bad loan problems.
Behavioral economics/finance is thought to be promising approach to money and banking issues. The research result in this project is a first step to the understanding of Japanese banking system from the behavioral economics/finance viewpoints.
Research Products (6results)