Lieli, Robert P.; White, Halbert - In: Journal of Econometrics 157 (2010) 1, pp. 110-119
We examine the econometric implications of the decision problem faced by a profit/utility-maximizing lender operating in a simple "double-binary" environment, where the two actions available are "approve" or "reject", and the two states of the world are "pay back" or "default". In practice, such...