Bose, Arup ; Pal, Debashis ; Sappington, David E.M. (2012) Extreme screening policies European Economic Review, 56 (8). pp. 1607-1620. ISSN 0014-2921
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Official URL: http://doi.org/10.1016/j.euroecorev.2012.09.001
Related URL: http://dx.doi.org/10.1016/j.euroecorev.2012.09.001
Abstract
We show that a lender often experiences increasing marginal returns to screening in a standard setting where the lender decides how intensively to screen the projects of prospective borrowers. The increasing marginal returns imply that even small changes in industry parameters can produce large changes in equilibrium screening intensity. In particular, a small reduction in the expected return from borrowers' projects can produce a pronounced increase in the screening of prospective borrowers, with substantial corresponding welfare effects.
| Item Type: | Article |
|---|---|
| Source: | Copyright of this article belongs to Elsevier Science. |
| ID Code: | 135060 |
| Deposited On: | 18 Jan 2023 09:22 |
| Last Modified: | 18 Jan 2023 09:22 |
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