Automotive manufacturers are known to use deadline-based convex incentives to motivate dealerships to sell new cars. This paper shows that dealerships respond to these incentive targets by pushing customers from used to new cars as the end of the month approaches, and that subprime loans written...

Using a randomized experiment in the auto lending industry, we provide causal evidence of higher loan profitability and lower default rates with algorithmic machine underwriting, relative to human underwriting. We find that machine-underwritten loans generate 10.2% higher profit than...