In this paper, we introduce models of sequential decision making in consumer lending. From the definition of adverse selection in static lending models, we show that homogenous borrowers take-up offers at different instances of time when faced with a sequence of loan offers. We postulate that...

In this paper, we introduce models of sequential decision making in consumer lending. From the definition of adverse selection in static lending models, we show that homogenous borrowers take-up offers at different instances of time when faced with a sequence of loan offers. We postulate that...

We model the term structure of Corporate Credit based on Competitive Advantage. Our approach dispenses with the volatility based Geometric Brownian Motion prevalent in most structural-form models. Instead we consider the competitive advantage enjoyed by a firm as the central tenet of our model...