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SUMMARY:'The economics of badmouthing: Defamation\, rackeetering and the F
 rench Financial Press at the end of the 19th century.' - Dr Vincent Bignon
 \, EconomiX\, University of Paris - Nanterre
DTSTART:20091130T170000Z
DTEND:20091130T190000Z
UID:TALK20748@talks.cam.ac.uk
CONTACT:D'Maris Coffman
DESCRIPTION:Reputation\, a source of rents\, cannot be conveniently insure
 d. Anybody with a brand or public name must be concerned with the costs of
  badmouthing and can be ready to give up revenue to prevent circulation an
 d propagation of false and damaging information. As a result\, badmouthing
  is an instrument of racket and the press is likely to be used as a tool o
 f extortion. This paper applies this argument in the context of the market
  for financial information in France during the period 1880-1914 focusing 
 on the incidence of weak property rights arising partly from soft legal re
 strictions. Using empirical evidence on the industrial organization of the
  press and on a major badmouthing racket\, we provide two main results. Fi
 rst we show that disinformation and racketeering do happen in specific seg
 ments of the market for news and in special situations only. This is owing
  to the emergence of organizational solutions to deal with rumors. We show
  that rackets occurred in smaller and less reputable journals\, what we ca
 ll “bad” or “zombie” journals which were – in the extreme cases 
 - called or recalled to life only to wage a press campaign. Second a natur
 al consequence of the existence of threats of badmouthing directs a flow o
 f income towards good journals because the best insurance against bad mout
 hing by bad journals consists in paying for good mouthing by good journals
 . This conclusion may contribute to solve the puzzle of why rating agencie
 s managed to charge borrowers for their services.
LOCATION:Lucia Windsor Room\, Newnham College
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