e the severity of the problem these responsible, honest, ethical contracts are becoming more common and in many cases mandatory. So, where is the financial paradigm supposed to go from here? What shift will help in remedying this growing contractual dilemma? According to some reputation could be the key ingredient missing from the current paradigmatic financial pie.The reputation solution is the concept of using manager or company reputations as a means of deciding with whom you will enter into an implicit contract. The better reputation for validating a contract an entity has, the more likely another will enter one with them and vice a versa. But, if the reputation concept worked "then we have no economic need to challenge or move beyond the finance paradigm. The ill effects of opportunism will be successfully reined in by agents' desire to build and maintain their reputations." (Dobson,pp.39) But this desire for good reputations does not exist. What does exist in the present paradigm maybe managers "rationally act in a way that honors contracts, for example they may build a reputation. They may not, however, be rationally motivated primarily by a desire to honor contracts since this is not a material objective." (Dobson,pp. 14) Managers may have a good reputation but not because they are responsible, honest, and ethically sound but because it may be a way to stimulate their opportunistic passion. Consequently, reputation is not a solution to the problem, rather a cloud of dust hiding the core of the issue.As stated before, the root of the finance paradigm is the goal of personal maximization in the form of materialistic gain and growth. In order to shift the paradigm the goal of the discipline needs to be shifted. "In order to rationalize intrinsic honesty, our focus must shift from material payoffs accruing to the agent to the agent's fundamental concept of rationality itself. We must, in essence, move beyond economic ...
