Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology derived from theoretical models. We randomized 58,000 direct mail...

Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology derived from theoretical models. We randomized 58,000 direct mail...

Numerous laboratory studies find that minor nuances of presentation and description change behavior in ways that are inconsistent with standard economic models. How much do these context effect matter in natural settings, when consumers make large, real decisions and have the opportunity to...

Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about “unproductive,”...

Online platforms often face challenges being both fair (i.e., non-discriminatory) and efficient (i.e., maximizing revenue). Using computer vision algorithms and observational data from a microlending marketplace, we find that choices made by borrowers creating online profiles impact both of...