This study analyzes the effect of the reputation SMEs get in a relationship lending on the cost of next loans. A unique dataset of 734 Spanish SMEs' relationship lending provides information on a loan-by-loan basis about the ex post previous loan performance, which measures reputation. No prior...

A key question in credit markets is how to disclose borrowers’ private information. Typically, banks offer incentive compatible contracts (with collateral) to induce borrowers to disclose their private information. However, if men and women systematically differ in their risk taking behavior,...

Purpose – The current credit rationing strongly influences the viability of SMEs innovation projects. In this context, the practice of screening borrowers by project success probability has become a paramount consideration for both lenders and firms. The aim of this paper is to test the...

A major characteristic of financial markets is information asymmetry. To combat its problems principals can use screening. That is, they can offer the clients a menu of contracts and infer their risk level from their choices. If the pattern of choices that clients with different risk level make...

The current collapse of credit markets has left small and medium enterprises (SMEs) facing severe credit rationing. The practice of screening borrowers by risk level has become a paramount consideration for both lenders and firms. This paper represents the first empirical test of the screening...

In this paper we test Bester's (1985, 1987) prediction about the separating role of contracts that involve both interest rates and collateral requirements in credit markets. To test this prediction we use data from natural credit markets and controlled experiments. Using a sample of credits to...

In this paper we present a theoretic two-stage model for retailers location and consumers purchase decision. Retailers decision problem is formalized in terms of a zero-sum game, whose payoffs refers to retailers' market share and consumers decision problem is formalized in terms of a discrete...