Libor as a Keynesian Beauty Contest
A Process of Endogenous Deception
Bibliographic Data
| ID | 12229463 |
|---|---|
| Authors | Alexis Stenfors (0000-0002-1266-7051, University of Portsmouth, corresponding author) |
| Year | 2014 |
| Volume | 26 |
| Issue | 3 |
| Pages | 392-407 |
| Publication date | 2014-06-13 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Review of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0953-8259 • E-ISSN: 1465-3982 |
| Publisher | Taylor & Francis (PUBLISHER • GB) |
| DOI | 10.1080/09538259.2014.917824 |
| OpenAlex | W2056628351 |
| Language | EN |
| Citations received | 3 |
| References cited | 9 |
This paper uses the Keynesian Beauty Contest as a theoretical framework to analyse the London Interbank Offered Rate (LIBOR) fixing mechanism, where the actual money market rate is seen as a fundamental value towards which the LIBOR should aim. By treating the LIBOR as the outcome of a particular kind of p-beauty contest game, in which players (LIBOR banks) are guided by higher order beliefs, a process is created whereby they are not solely dependent on their own incentives and constraints. Instead, potential deception is generated endogenously though the fixing process itself, resulting in systematic deviations of the LIBOR from its fundamental value
CONTEST · Economics · Financial economics · Interbank lending market · Interest rate · Keynesian economics · Libor · LIBOR market model · Monetary economics · Political science · Banking stability, regulation, efficiency · Economic theories and models · Law · Monetary Policy and Economic Impact
| Citations per year | 0.3 |
|---|---|
| Citation span | 2016 - 2018 (3) |
| Highly cited | No |