Irresponsible Lending’ with a Better Informed Lender
Bibliographic Data
| ID | 9709612 |
|---|---|
| Authors | Roman Inderst (0000-0002-1076-9927, University of Frankfurt and London School of Economics, corresponding author) |
| Year | 2008 |
| Volume | 118 |
| Issue | 532 |
| Pages | 1499-1519 |
| Publication date | 2008-10-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2008.02179.x |
| OpenAlex | W2093811796 |
| Language | EN |
| Citations received | 2 |
| References cited | 19 |
We present a simple model of personal finance in which an incumbent lender has an information advantage "vis-à-vis" both potential competitors and households. In order to extract more consumer surplus, a lender with sufficient market power may engage in 'irresponsible' lending, approving credit even if this is knowingly against a household's best interest. Unless rival lenders are equally well informed, competition may reduce welfare. This holds, in particular, if less informed rivals can free ride on the incumbent's superior screening ability. Copyright © The Author(s). Journal compilation © Royal Economic Society 2008
Central bank · Economic history · Economics · Keynesian economics · Law and economics · Lender of last resort · Monetary policy · Political science · Sociology · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Housing, Finance, and Neoliberalism
| Unique citing works | 2 |
|---|---|
| Citations per year | 0,13 |
| Citation span | 2010 - 2012 (3) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 2 |