Search results for "credit screening"
showing 2 items of 2 documents
The role of «perceived loss» aversion on credit screening: an experiment
2013
A major characteristic of credit markets is information asymmetry.To combat its problems, as credit rationing, principals can use a menu of contracts to screen clients with different risk level. We conduct a laboratory experiment to address an important question for such settings —does the framing of the offered menu of contracts interfere with the self-selection mechanism? The answer is yes. We find subjects' choices shift when the same (positive) outcomes of the same menu of contracts are presented in two different frames. Subjects exhibit loss aversion in their perception of the positive outcomes below the reference point, and self-selection fails to occur. Uno de los mayores problemas a…
Are credit screening contracts designed for men?
2022
AbstractAccess to credit is key to succeed in business. Theoretical models of credit under asymmetric information classify borrowers and grant or deny credit, typically based on incentive-compatible contracts with collateral. However, if women are particularly risk averse, female borrowers may be wrongly classified and denied credit. We conduct in three countries a laboratory experiment to study this systematic gender difference. Results show that incentive-compatible contracts with collateral fail to disclose women’s private information, while disclosing men’s private information. We suggest that banks should incorporate the gender difference in risk attitudes to avoid the glass ceiling in…