Polygamy or plurality of wives is one of the controversial questions connected with the family system of Islam. It should be noted that in many Muslim societies today the practice of polygamy is rare since the gap between the numbers of both sexes is not huge. One can, safely, say that the rate of polygamous marriages in the Muslim world is much less than the rate of extramarital affairs in the West. In other words, men in the Muslim world today are far more strictly monogamous than men in the Western world.
A number of studies have pointed to various mistakes that consumers might make in their consumption-saving and financial decisions (e.g., Thaler and Shefrin, 1988). However, it remains unclear how systematic and costly such mistakes are in practice.
Studies of consumer decision-making in actual market environments are rare. Among the few such studies, DellaVigna and Malmendier (2002) find that consumers systematically choose sub-optimal membership plans at health clubs, but Miravete (2003) finds consumers’ choices of telephone billing plans to be closer to optimal.
The recent sub-prime crisis has put financial risk, and its effects on participating actors, in a central position for the proper functioning of capital markets. We examine the management of such financial risks from the perspective of two interested actors: financial institutions that act as lenders, and industrial firms that act as borrowers. This paper examines financial interlocks between banks and industrial companies, and its relationship to earnings quality and the cost of debt. This issue is especially pertinent given the inherent conflict of interest present between banks and industrial firms, and their poorly understood inter relationships.
