The paper analyzes the effect of competition between credit rating agencies (CRAs) on the information content of ratings. We show that a monopolistic CRA pools sellers into multiple rating classes and has partial market coverage. This provides an opportunity for market entry. The entrant designs...

The paper analyzes how entry of a new rating agency changes the information content of ratings. In the first part of the paper we build a model to analyze the optimal disclosure policy of a monopoly rating agency depending on the value of information to the buyers, and then describe the...

The paper analyzes how entry of a new rating agency changes the information content of ratings. In the first part of the paper we build a model to analyze the optimal disclosure policy of a monopoly rating agency depending on the value of information to the buyers. Then we describe the potential...