Adverse Selection in the Home Equity Line of Credit Market

2017 ◽  
Author(s):  
Michael LaCour-Little ◽  
Yanan Zhang
Keyword(s):  
Adverse Selection ◽  
Credit Market ◽  
Home Equity

Adverse Selection in the Home Equity Line of Credit Market

2018 ◽  
Vol 40 (3) ◽  
pp. 453-474
Author(s):  
Michael LaCour-Little ◽  
Yanan Zhang
Keyword(s):  
Adverse Selection ◽  
Credit Market ◽  
Home Equity

The Role of Soft Information in a Dynamic Contract Setting: Evidence from the Home Equity Credit Market

2010 ◽  
Author(s):  
Sumit Agarwal ◽  
Brent W. Ambrose ◽  
Souphala Chomsisengphet ◽  
Chunlin Liu
Keyword(s):  
Credit Market ◽  
Soft Information ◽  
Home Equity ◽  
Dynamic Contract

Is there adverse selection in the credit market?

2001 ◽  
Vol 3 (3) ◽  
pp. 215-238 ◽  
Author(s):  
Robert Cressy ◽  
Otto Toivanen
Keyword(s):  
Adverse Selection ◽  
Credit Market

Credit Market Consequences of Improved Personal Identification: Field Experimental Evidence from Malawi

2012 ◽  
Vol 102 (6) ◽  
pp. 2923-2954 ◽  
Author(s):  
Xavier Giné ◽  
Jessica Goldberg ◽  
Dean Yang
Keyword(s):  
Simple Model ◽  
Field Experiment ◽  
Adverse Selection ◽  
Default Risk ◽  
Credit Market ◽  
Personal Identification ◽  
Randomized Field Experiment ◽  
Ex Ante ◽  
Loan Terms ◽  
Market Consequences

We implemented a randomized field experiment in Malawi examining borrower responses to being fingerprinted when applying for loans. This intervention improved the lender's ability to implement dynamic repayment incentives, allowing it to withhold future loans from past defaulters while rewarding good borrowers with better loan terms. As predicted by a simple model, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest of the borrowers. We provide unique evidence that this improvement in repayment rates is accompanied by behaviors consistent with less adverse selection and lower moral hazard. (JEL D14, D82, G21, O12, O16)

A Game-Theoretic Foundation for Competitive Equilibria in the Stiglitz–Weiss Model

2012 ◽  
Vol 13 (2) ◽  
pp. 211-227 ◽  
Author(s):  
Lutz G. Arnold
Keyword(s):  
Adverse Selection ◽  
Price Competition ◽  
Financial Intermediation ◽  
Credit Market ◽  
Selection Model ◽  
Financial Intermediaries ◽  
Competition Models ◽  
Competitive Equilibria ◽  
Game Theoretic

Abstract Financial intermediaries are, by definition, engaged in two-sided competition. Despite the well-known problems of achieving competitive solutions under twosided price competition, models of financial intermediation are commonly solved for competitive equilibria. This article provides a game-theoretic foundation for competitive equilibria in one of the most important models of financial intermediation, the seminal Stiglitz-Weiss (1981) adverse selection model of the credit market with a continuum of borrower types.

scholarly journals Behavioral Foundations of Microcredit: Experimental and Survey Evidence from Rural India

2012 ◽  
Vol 102 (2) ◽  
pp. 1118-1139 ◽  
Author(s):  
Michal Bauer ◽  
Julie Chytilová ◽  
Jonathan Morduch
Keyword(s):  
Risk Aversion ◽  
Moral Hazard ◽  
Adverse Selection ◽  
South India ◽  
Credit Market ◽  
Market Imperfections ◽  
Rural India ◽  
Credit Market Imperfections ◽  
Time Discounting ◽  
Behavioral Features

We use experimental measures of time discounting and risk aversion for villagers in south India to highlight behavioral features of microcredit, a financial tool designed to reduce poverty and fix credit market imperfections. The evidence suggests that microcredit contracts may do more than reduce moral hazard and adverse selection by imposing new forms of discipline on borrowers. We find that, conditional on borrowing from any source, women with present-biased preferences are more likely than others to borrow through microcredit institutions. Another particular contribution of microcredit may thus be to provide helpful structure for borrowers seeking self-discipline. JEL: G21, I38, O15, O16, O18

The Role of Soft Information in a Dynamic Contract Setting: Evidence from the Home Equity Credit Market

2011 ◽  
Vol 43 (4) ◽  
pp. 633-655 ◽  
Author(s):  
SUMIT AGARWAL ◽  
BRENT W. AMBROSE ◽  
SOUPHALA CHOMSISENGPHET ◽  
CHUNLIN LIU
Keyword(s):  
Credit Market ◽  
Soft Information ◽  
Home Equity ◽  
Dynamic Contract
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