Putting integrity Into Finance: A Purely Positive Approach
NBER Working Paper No. 19986
The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare (that continue unabated in spite of all the various efforts to curtail the behavior that results in those scandals) argues strongly for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that reveals integrity as a purely positive phenomenon with no normative aspects whatsoever. Adding integrity as a positive phenomenon to the paradigm of financial economics provides actionable access (rather than mere explanation with no access) to the source of the behavior that has resulted in those damaging effects on value and human welfare, thereby significantly reducing that behavior. More generally we argue that this addition to the paradigm of financial economics can create significant increases in economic efficiency and productivity.
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An data appendix is available at http://www.nber.org/data-appendix/w19986
Document Object Identifier (DOI): 10.3386/w19986
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