Carney, Kevin; Kremer, Michael; Lin, Xinyue; Rao, Gautam - 2022
Collateral requirements play an important role in credit markets. This paper shows that the endowment effect … collateral. Using a field experiment in Kenya, we show that borrowers instead strongly prefer loans collateralized using the new … findings imply that assets which are difficult to use as collateral—which cannot be financed by SACLs—will be invested in less …
