Debt Contracts with Financial Intermediation with Costly Screening
The authors develop a credit market model with adverse selection where risk-neutral borrowers self select because lenders make use of a costly screening technology. Equilibrium contracts are debt contracts, and this is robust to randomization, in contrast to results for the costly state verification model. This framework permits optimal financial intermediary structures, in that there is delegated screening in equilibrium if many borrowers are required to fund individual investment projects.
Volume (Year): 31 (1998)
Issue (Month): 3 (August)
|Contact details of provider:|| Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4|
Web page: http://economics.ca/cje/
More information through EDIRC
|Order Information:|| Web: http://economics.ca/en/membership.php Email: |