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Credit and identity theft

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  • Charles M. Kahn
  • William Roberds

Abstract

The quintessential crime of the information age is identity theft, the malicious use of personal identifying data. In this paper we model ?identity? and its use in credit transactions. Various types of identity theft occur in equilibrium, including ?new account fraud,? ?existing account fraud,? and ?friendly fraud.? The equilibrium incidence of identity theft represents a tradeoff between a desire to avoid costly or invasive monitoring of individuals on the one hand and the need to control transactions fraud on the other. Our results suggest that technological advances will not eliminate this tradeoff.

Suggested Citation

  • Charles M. Kahn & William Roberds, 2005. "Credit and identity theft," FRB Atlanta Working Paper 2005-19, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2005-19
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    References listed on IDEAS

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    More about this item

    Keywords

    Identity theft;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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