Self-selection and discrimination in credit markets
AbstractThis paper increases understanding of the causes and consequences of discrimination in credit markets. It develops an underwriting model in which lenders use a simple Bayesian updating process to evaluate applicant creditworthiness. It also models individuals' self-selection behavior to show how market frictions can affect application decisions.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 9809.
Date of creation: 1998
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-10-15 (All new papers)
- NEP-CFN-1998-10-15 (Corporate Finance)
- NEP-FMK-1998-10-15 (Financial Markets)
- NEP-MIC-1998-10-15 (Microeconomics)
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