We show that lenders join a U.S. commercial credit bureau when information asymmetries between incumbents and entrants … create an adverse selection problem that hinders market entry. Lenders also delay joining when information asymmetries … competition. We exploit shocks to information coverage to show that lenders enter new markets after joining the bureau in a …

adverse selection (AS). In particular, we study how the level of such exemption affects the role of collateral depending on … the dominant source of asymmetric information. Under MH, conditional on the level of exemption, the cost of credit is … higher for borrowers who are requested to post collateral. Moreover, conditional on posting collateral, the cost of credit …

We explore whether behavioral biases impede the effective processing and interpretation of soft information in private …) common identity. Specifically, we find that using soft information in lending decisions leads to worse loan quality when loan … information in lending decisions …

Relationship lending has an advantage over transactions-based lending from the viewpoint of information richness … officer has an incentive to shirk if his monitoring activity is not observable and the information that is produced by …

We study specialized lending in a credit market competition model with private information. Two banks, equipped with … similar data processing systems, possess "general" signals regarding the borrower's quality. However, the specialized bank … based on its specialized signal conditional on making a loan. This private-information-based pricing helps deliver the …

inclined to pledge outside collateral than is the low-risk borrower. However, this finding does not hold when the bank can …Within a framework of debt renegotiation and a priori private information, what is the role of outside and inside … collateral? The literature shows that unobservability of the project’s returns implies that the high-risk borrower is more …

We studied information and interaction processes in six lending relationships between a universal bank and medium sized …, bank monitoring is based mainly on cheap, retrospective and internal data. In case of distress, more expensive, prospective … and external information is used. The level of monitoring and the willingness to renegotiate the lending relationship …

We explore Lithuanian credit register data and two bank closures to provide a novel estimate of firms' bank …-switching costs and a novel identification of the hold-up problem. We show that when a distressed bank's closure forced firms to … more, which suggests that information asymmetries significantly contribute to switching costs. In line with banks …

) to assess whether this use of discretion is driven by information about the creditworthiness of the borrower or by the …. We find that this smoothing of credit ratings is hardly driven by soft information: Loan officers are just as likely to …