Why do (or do not) banks share customer information? A comparison of mature private credit markets and markets in transition
AbstractCredit bureaus administering information sharing among lenders about customers reduce information asymmetry and should be key to modern credit markets. In contrast to former studies, we show that willingness to share information depends more on institutions and market concentration than on demand or other market characteristics such as, regional diversity or local monopolies. We show using infinite period models with strategic behavior that lenders' interest to share information depends on market concentration and the type of information sharing arrangement. Sharing bad information only is the dominant strategy if banks think long-term. If banks are myopic no information sharing may occur.
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Bibliographic InfoPaper provided by Institute of Economics, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 0603.
Date of creation: 24 Apr 2006
Date of revision: 24 Apr 2006
Organisational Behaviour; Transaction Costs; Criteria for Decision-Making under Risk and Uncertainty; Asymmetric and Private Information; Intertemporal Firm Choice and Growth; Investment; or Financing; Banks; Other Depository Institutions; Mortgages;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Financing, Investment, and Capacity
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-29 (All new papers)
- NEP-CBA-2006-04-29 (Central Banking)
- NEP-FIN-2006-04-29 (Finance)
- NEP-FMK-2006-04-29 (Financial Markets)
- NEP-MIC-2006-04-29 (Microeconomics)
- NEP-TRA-2006-04-29 (Transition Economics)
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