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competition on this choice. We find that competing banks use collateral less often than a monopolistic bank because competition …
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We consider an imperfectly competitive loan market in which a local relationship lender has an information advantage … extracting the full surplus from projects, so that she inefficiently rejects marginally profitable projects. Collateral mitigates … relatively smaller information advantage face higher collateral requirements, and that technological innovations that narrow the …
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competition on this choice. We find that competing banks use collateral less often than a monopolistic bank because competition …
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