Retesting the institutional memory hypothesis: An experimental study

In this article, we set ourselves a task to test institutional memory hypothesis as a core of endogenous credit cycles. According to this hypothesis, risks taken by creditors depend largely on availability heuristic and experience of loan officers. To assess validity of this hypothesis we construct and estimate a simple VAR model. The data for this model is acquired from results of an experimental study (lasted for 70 rounds), the purpose of which is to identify behavioral patterns of participants while meeting demand for credit, specifics of subjectively weighted assessment of credit risk, based on shock approach. The results of the study allow confirming institutional memory hypothesis. After initial shock of bad debts, number of periods to recover willingness to accept risk has increased by 39%, which supports the hypothesis of availability heuristic’s influence. However, with improvement of loan portfolio’s quality, willingness to take risk is restoring. In addition, we managed to confirm existence of risk’s underestimation and overestimation periods in an experimental manner. Key words: Institutional memory hypothesis, Credit cycle, Availability heuristic, Credit risk, Bounded rationality. JEL: G02, E32, E51. Ponovo testiranje hipoteze institucionalnog pamcenja: Eksperimentalna studija U radu postavili smo zadatak da testiramo hipotezu o institucionalnom pamcenju kao jezgru endogenih kreditnih ciklusa. Prema ovoj hipotezi, rizici koje donatori preuzimaju u velikoj meri zavise od heuristicke dostupnosti i iskustva kreditnih službenika. Da bismo procenili validnost ove hipoteze, konstruisemo i ocenjujemo jednostavan VAR model. Podaci za ovaj model su nabavljeni iz rezultata eksperimentalne studije (koji je trajao 70 krugova), cija je svrha da se identifikuju obrasci ponasanja ucesnika u toku zadovoljenja potražnje za kreditom, specificnosti subjektivno ponderisane procene kreditnog rizika, zasnovane na pristupu koji se bazira na sokovima. Rezultati studije omogucavaju potvrđivanje hipoteze o institucionalnom pamcenju. Nakon inicijalnog soka zbog losih dugova, broj perioda za povracaj volje za prihvatanje rizika povecao se za 39%, sto podržava hipotezu o uticaju heuristicke raspoloživosti. Međutim, uz poboljsanje kvaliteta kreditnog portfolia, volja za uzimanje rizika je vracena. Pored toga, uspeli smo da potvrdimo postojanje potcenjivanja i precenjivanja rizika na ekperimentalni nacin. Kljucne reci: hipoteza institucionalnog pamcenja, kreditni ciklus, heuristicka raspoloživost, kreditni rizik, ogranicena racionalnost.