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Signal Jamming in New Credit Markets


  • van Tassel, Eric


This paper develops a simple two-period model in which a lender's credit operations in a new market end up externalizing information on borrowers' repayment capabilities. This information improves the competitive position of outside lenders by allowing them to enter the credit market with a more accurate description of potential clients. Equilibrium strategies are then identified where an inside lender chooses to offer a costly first-period contract with the explicit objective of distorting the quality of the external information flow in the second period.

Suggested Citation

  • van Tassel, Eric, 2002. "Signal Jamming in New Credit Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(2), pages 469-490, May.
  • Handle: RePEc:mcb:jmoncb:v:34:y:2002:i:2:p:469-90

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    References listed on IDEAS

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    Cited by:

    1. Guha, Brishti & Chowdhury, Prabal Roy, 2013. "Micro-finance competition: Motivated micro-lenders, double-dipping and default," Journal of Development Economics, Elsevier, vol. 105(C), pages 86-102.
    2. Sergio Navajas & Jonathan Conning & Claudio Gonzalez-Vega, 2003. "Lending technologies, competition and consolidation in the market for microfinance in Bolivia," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(6), pages 747-770.
    3. Hachem, Kinda, 2011. "Relationship lending and the transmission of monetary policy," Journal of Monetary Economics, Elsevier, vol. 58(6), pages 590-600.
    4. Kaniska Dam & Prabal Roy Chowdhuri, 2015. "Incentives and Competition in Microfinance," Working papers DTE 579, CIDE, División de Economía.

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