Trust, Transparency, and Complexity

• 成果类型: Article
• 署名作者: Thakor, Richard T.; Merton, Robert C.
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; Massachusetts Institute of Technology (MIT); National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhad011
• 发表日期: 2023
• 页码: 3213
• 关键词: information; disclosure; intermediation; reputation; INNOVATION; cost

摘要

This paper develops a theory that generates an equilibrium relationship between product complexity, transparency, and trust in firms. Complexity, transparency, and the evolution of trust are all endogenous, and equilibrium transparency is nonmonotonic. The least-trusted firms choose the lowest product complexity, remain opaque, and substitute ex ante third-party verification for information disclosure and trust. Firms with an intermediate level of trust choose an intermediate level of complexity and transparency through disclosure, with more trusted firms choosing greater complexity and lower transparency. The most-trusted firms choose maximum complexity while remaining opaque, eschewing both verification and disclosure.