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Type	Working Paper
Scope	Discipline-based scholarship
Title	Asymmetric information and imperfect competition in lending markets
Organization Unit	Department of Economics (Florian Scheuer)
Authors	Gregory S. Crawford Nicola Pavanini Fabiano Schivardi
Language	English
Institution	University of Zurich
Series Name	Working paper series / Department of Economics
Number	192
ISSN	1664-7041
Number of Pages	46
Date	2015
Abstract Text	We measure the consequences of asymmetric information and imperfect competition in the Italian lending market. We show that banks' optimal price response to an increase in adverse selection varies with competition. Exploiting matched data on loans and defaults, we estimate models of demand for credit, loan use, pricing, and firm default. We find evidence of adverse selection and evaluate its importance. While indeed prices rise in competitive markets and decline in concentrated ones, the former effect dominates, suggesting that while market power can mitigate the adverse effects of asymmetric information, mainstream concerns about its effects survive with imperfect competition.
Related URLs	http://www.econ.uzh.ch/static/workingpapers.php https://www.econ.uzh.ch/en/research/workingpapers.html
Other Identification Number	merlin-id:11954
PDF File	Download from ZORA
Export	BibTeX EP3 XML (ZORA)
Keywords	Asymmetric information, imperfect competition, lending markets, Italian banking, adverse selection, Asymmetrische Information, Unvollständige Konkurrenz, Kreditmarkt,