Credit rating and competition
分析了信用评级机构在垄断与双头垄断下的行为差异，发现竞争可能加剧评级膨胀并降低社会福利，尤其当新进入者声誉较低时。
Abstract We analyze the effect of competition between credit rating agencies (RA) which trade‐off reputation (future income) and rating inflation (current income). We find that relative to monopoly, RA are more likely to inflate ratings under duopoly. Moreover, competition reduces welfare (the net income of the projects that are rated good) if the new entrant has low reputation and increases it if the new entrant has high reputation. Therefore, our results suggest that lowering barriers to entry (thus, allowing low‐reputation credit RA to enter the market) might increase the level of rating inflation and reduce welfare.