Credit markets with imperfect information: Risk-aversion versus pessimism

C-Tier
Journal: Economics Letters
Year: 2018
Volume: 165
Issue: C
Pages: 35-38

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Stiglitz and Weiss (1981) credit rationing is embedded within rank dependent expected utility theory. Our results show that sufficient pessimism or sufficient risk-aversion by borrowers may eliminate adverse selection. Moreover, lender optimism may eliminate credit rationing even when adverse selection exists.

Technical Details

RePEc Handle
repec:eee:ecolet:v:165:y:2018:i:c:p:35-38
Journal Field
General
Author Count
2
Added to Database
2026-01-24