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We propose a parsimonious model with adverse selection where delinquency, renegotiation, and bankruptcy all occur in … equilibrium as a result of a simple screening mechanism. A borrower has private information about her cost of bankruptcy, and a …, and thus become delinquent. The lender renegotiates with some delinquent borrowers. In the absence of renegotiation …
Persistent link: https://www.econbiz.de/10013030850
We consider borrowers with the opportunity to raise funds from a competitive banking sector that shares information, and from an alternative hidden lender. The presence of the hidden lender restricts the contracts that can be obtained from the banking sector. In equilibrium some borrowers obtain...
Persistent link: https://www.econbiz.de/10011071410
We empirically study how the underlying riskiness of the pool of home equity line of credit originations is affected over the credit cycle. Drawing from the largest existing database of U.S. home equity lines of credit, we use county-level aggregates of these loans to estimate panel regressions...
Persistent link: https://www.econbiz.de/10013121636
In this paper, I consider the problem of designing an optimal screening contract for a principal facing an agent whose …, pooling always occurs with respect to ex ante types while in the case of commitment with renegotiation, the introduction of an … ex ante adverse selection problem is shown to have a non trivial effect on the possibility of interim renegotiation in …
Persistent link: https://www.econbiz.de/10005696470
We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causal effect of … leverage must weigh default-prevention against market distortions due to adverse selection …
Persistent link: https://www.econbiz.de/10012850423
-term loan, and those who do default less. Additional findings suggest borrowers self-select on private information about their …
Persistent link: https://www.econbiz.de/10012971431
who do default less. Additional findings suggest borrowers self-select on private information about their future ability …
Persistent link: https://www.econbiz.de/10014116640
. That selection works against banks; large overdrafts cost more to supply and, if depositors default, banks lose more, so …
Persistent link: https://www.econbiz.de/10003947557
. That selection works against banks; large overdrafts cost more to supply and, if depositors default, banks lose more, so …
Persistent link: https://www.econbiz.de/10014204039
colleagues get more income net of production costs. Screening workers with equal productivity but different fairness concerns is …
Persistent link: https://www.econbiz.de/10010366541