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The Information Technology Revolution and the Unsecured Credit Market

Sanchez, Juan M. - 2023

information and costly screening is introduced. When information costs are high, the design of contracts under private information …

Persistent link: https://www.econbiz.de/10014254423

Risk sharing in the presence of a public good

Schroth, Josef - 2015

This paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents' relative preference for private versus public good consumption. I show how private good consumption should be coordinated...

Persistent link: https://www.econbiz.de/10011302006

Strategic information suppression in borrowing and pre-lending cognition : theory and evidence

Chen, Zhongwen; Zhao, Xiaojian - In: Games 14 (2023) 3, pp. 1-24

-lending cognition increases with the default probability, as the default probability is small and decreases thereafter. Evidence from a …

Persistent link: https://www.econbiz.de/10014422638

Does Credit Reporting Lead to a Decline in Relationship Lending? Evidence from Information Sharing Technology

Sutherland, Andrew - 2019

I examine how credit reporting affects where firms access credit and how lenders contract with them. I use within firm-time and lender-time tests that exploit lenders joining a credit bureau and sharing information in a staggered pattern. I find information sharing reduces relationship-switching...

Persistent link: https://www.econbiz.de/10012904184

Forbearance lending and soft budget constraints in a model of multiple heterogeneous bank financing

Schüle, Tobias (contributor) - 2006

Empirical evidence suggests that banks often engage in refinancing of intrinsically insolvent debtors instead of writing of their non-performing loans. Such forbearance lending may induce soft budget constraints for the debtors, as it diminishes their incentives to thwart default. This paper...

Persistent link: https://www.econbiz.de/10003636668

A detrimental feedback loop : deleveraging and adverse selection

Bertsch, Christoph - 2013

Market distress can be the catalyst of a deleveraging wave, as in the 2007/08 financial crisis. This paper demonstrates how market distress and deleveraging can fuel each other in the presence of adverse selection problems in asset markets. At the core of the detrimental feedback loop is agents'...

Persistent link: https://www.econbiz.de/10010202960

Positive Profits in Competitive Credit Markets With Adverse Selection

Bernhardt, Dan - 2020

We analyze competitive credit markets with asymmetric information in which borrowers seek financing for either positive or negative net present value projects. The striking result is that there always exists an equilibrium where investment is efficient, while competitive lenders make strictly...

Persistent link: https://www.econbiz.de/10012834214

The Effects of Redistributive Taxation in Credit Markets with Adverse Selection

Dosis, Anastasios - 2019

This paper studies the effects of redistributive taxation in credit markets with adverse selection and shows that there exists a range of taxes that creates Pareto improvement relative to the (zero-tax) market allocation by increasing aggregate investment. For sufficiently high taxes, an...

Persistent link: https://www.econbiz.de/10012903544

Costly Screening, Self-Selection, Fraud, and the Organization of Credit Markets

Yu, Pingkang - 2016

This paper analyzes a credit market that includes a costly, universal and imperfect screening technology with both type … I and type II errors and borrower self-selection. Universal screening is necessary because there are fraudulent … consumer lending conditions. Contrary to the results in previous models with random screening, the combination of universal …

Persistent link: https://www.econbiz.de/10012993630

Credit Enforcement Cycles

Drozd, Lukasz A. - 2017

self-propagatory and adversely affect the supply of credit. We propose a unifying theory that models the interplay between …

Persistent link: https://www.econbiz.de/10012948698