rising residential rents in chinese mega cities the role of monetary policy although there have been a large number of studies carried out on fluctuations in housing prices little is known about what causes changes in residential rents which are inextricably intertwined with urban living standards this is especially noteworthy in chinese cities which are now being challenged by the housing market frenzies shift share analysis is proposed to evaluate all possible triggers of residential rent inflation in three cities during the 2001 2013 period which covers two distinct monetary policy regimes in china it is found that the recent rise in residential rent comes as a result of aggregate inflation associated with an expansionary monetary policy since the 2008 global financial crisis and an all encompassing and stable policy stance should therefore be adopted

testing for asymmetric information in insurance markets the first goal of this paper is to provide a simple and general test of the presence of asymmetric information in contractual relationships within a competitive context we also argue that insurance data are particularly well suited to such empirical investigations to illustrate this claim we use data on contracts and accidents to investigate the extent of asymmetric information in the french market for automobile insurance using various parametric and nonparametric methods we find no evidence for the presence of asymmetric information in this market

credit lines and credit utilization while much is known about the characteristics of consumers or businesses that obtain credit lines relatively little is known empirically about credit line utilization after origination this study fills that gap by testing two interrelated hypotheses concerning borrower credit quality and credit line utilization the empirical analysis confirms that borrowers with higher expectations of future credit quality deterioration originate credit lines to preserve financial flexibility furthermore we estimate a competing risks model that confirms our predictions concerning changes in borrower credit line utilization in response to borrower credit quality shocks

durable goods monopolists durable goods monopolists face special problems because the sale of their products creates a secondhand market not controlled by the monopolist to the extent the monopolist is able to rent his product rather than sell it or to make binding promises about his future production such problems are ameliorated given the inability to do the above the monopolist is led to producing goods less durable than those produced by either competitive firms or monopolist returns a reverse averch johnson result that monopolist sellers may invest less in fixed costs including plant modernization and research and development than would the renters is shown it is also shown that even though sellers have less monopoly power than renters and nondurable goods monopolists it is possible that the seller will cause a greater deadweight loss than the other types of monopolies

permanent income hypothesis in emerging markets some brazilian evidence abstract this paper uses a dataset from one of the largest credit card issuers in brazil to investigate the extent of credit constraints for one of the world s largest emerging market economies in order to deal with the endogeneity problem from an observational dataset an identification strategy based on the issuer actual policies was used to better identify the long run effects of a credit card limit increase on debt the results point to a long run effect of credit limit on credit card debts of 0 1144 a similar size to the ones found in gross and souleles 2001 this value indicates the permanent income hypothesis is rejected for this sample and some evidence supporting a variation of buffer stock behavior is found furthermore results indicate the degree of heterogeneity in effects is much higher than similar results for developed countries lending credence to the conclusion credit constraints are much stronger for lower income groups this conclusion is in line to previous studies in brazil such as de lucinda and vieira 2014

interest rates and equity extraction during the housing boom credit record panel data from 1999 2010 indicates that the likelihood of home equity extraction borrowing on average about 40 000 against one s home peaked in 2003 when mortgage rates reached historic lows we estimate a 27 percent rise in extraction in response to a 100 basis point rate decline and that house price growth amplifies this relationship differential responses to interest rates and home price appreciation by borrower age and credit score provide new evidence of financial frictions finally equity extractions are associated with higher default risk consistent with the use of borrowed funds for consumption or illiquid investment

bank lending policy credit scoring and the survival of loans to evaluate loan applicants banks increasingly use credit scoring models the objective of such models typically is to minimize default rates or the number of incorrectly classified loans thereby they fail to take into account that loans are multiperiod contracts for which reason it is important for banks not only to know if but also when a loan will default in this paper a bivariate tobit model with a variable censoring threshold and sample selection effects is estimated for 1 the decision to provide a loan or not and 2 the survival time of granted loans the model proves to be an effective tool to separate applicants with short and with long survival times the bank s loan provision process is shown to be inefficient loans are granted in a way that conflicts with both default risk minimization and survival time maximization there is thus no trade off between higher default risk and higher return in the lending policy

taxation within cournot oligopoly abstract when the production of output causes pollution we often consider taxation as a means to reduce it this paper examines various forms of taxation to control pollution within cournot oligopoly it shows that two commonly used forms can actually increase pollution in contrast both of these forms unambiguously reduce pollution within the competitive model the paper provides conditions in terms of demand and technology that make taxation effective in the cournot oligopoly case another implication of the analysis is that outside the price taking framework asymmetry of cost functions is particularly important and deserves careful attention when we examine the effect of taxation

race ethnicity and credit card marketing there is a vast literature on discrepancies in consumer credit related to race and ethnicity i explore a pattern that was first identified in aggregate data by han keys and li 2011 in their study of credit access blacks were approximately 27 less likely to receive offers from credit card lenders during the sample period even after controlling for variables such as credit history household income and local economic conditions hispanics were 17 less likely to receive an offer after including controls the discrepancy is robust to lender specific regressions and the inclusion of a large number of explanatory variables my findings imply that marketing is an important area for analysis of discrimination in consumer credit due to the likely need for confidential information in further analysis investigation by an appropriate regulatory agency such as the consumer financial protection bureau would be useful

home is where the equity is mortgage refinancing and household consumption applying a permanent income model with exogenous liquidity constraints and mortgage behavior household refinancing when mortgage interest rates are historically high and rising a persistent empirical puzzle is explained using data from the panel study of income dynamics households experiencing an unemployment shock and having limited initial liquid assets to draw upon are shown to have been 25 more likely to refinance 1991 94 on average such liquidity constrained households converted over two thirds of every dollar of equity they removed into current consumption as mortgage rates plummeted 1991 94 producing an estimated expenditure stimulus of at least 28 billion

optimal dynamic durability abstract consider a firm that adjusts its production and the choice of durability for its products instantaneously we show that when the marginal cost with the respect to durability is nonincreasing a the optimal durability for both the competitive firm and the monopolist decreases over time and b the monopolist will produce a good with lower durability than the competitive firm we thus lend support for empirical findings and causal observations that found the phenomenon of declining durability over time

oligopolies and product durability abstract we analyze a simple two period quantity setting model where firms rent all of their output we compare the durability chosen by an oligopolist to the competitive socially optimal durability the model shows in subgame perfect equilibria the durability chosen by oligopolists will be cost minimizing independent of their output levels thus swan s independence result can be extended to oligopoly markets if the firms rent their output we also demonstrate the independence result can be extended to certain corner solutions

emissions taxation in durable goods oligopoly this paper examines the use of taxation to control external damage due to pollution when product durability is endogenously determined a special form of the emissions function is also examined which is equivalent to an excise tax on output the dynamic oligopoly model indicates that many conventional results in the durability and taxation literature need not hold when durability is endogenously determined in particular the analysis shows durability may not be independent of industry structure nor will firms minimize their manufacturing costs of providing service in addition the second best tax on imperfectly competitive firms is not necessarily less than the tax on a competitive firm when firms choose their product s durability

mortgage valuation under optimal prepayment mortgage originators offer borrowers various combinations of points loan fees and coupon high points and low coupon or low points and high coupon in this article points are interpreted as a device serving to separate borrowers with high prepayment probabilities from those with low prepayment probabilities borrowers and lenders are treated symmetrically both are risk neutral and both have complete and frictionless access to credit markets implying that borrowers can finance points if they wish except that borrowers prepayment speeds are private knowledge equilibria are derived both when borrowers cannot prepay voluntarily and when they can article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

durable good monopoly and best price provisions best price provisions guarantee buyers that the prices they pay are the lowest available if the seller subsequently cuts price then each previous buyer is entitled to a refund a durable good monopolist who offers certain forms of these provisions can construct a consistent plan yielding the same profits as rental agreements and contracts with explicit quantity commitments the provisions require special circumstances to be practical but they are simple and effective and appear in a variety of economic settings three applications are discussed international commodity agreements markets for electric turbogenerators and markets for financial claims copyright 1990 by american economic association

learning by doing and product durability many durable goods industries are industries that have significant learning affects i examine a monopolist s and social planner s cost minimizing durability choice in both the short and the long run when learning effects are present the model indicates that the relationship between durability and learning depends crucially upon whether or not knowledge decays and on learning s impact on the marginal cost of durability in particular this model demonstrates that swan s 1970 1971 independence result will hold in the long run if knowledge does not decay but will not hold if knowledge does decay thus whether or not monopolists will manufacture products with the same durability or quality as a social planner depends to a large extent on the type of learning process in the industry and on whether or not quality and durability directly influence this learning process

mortgage terminations heterogeneity and the exercise of mortgage options as applied to the behavior of homeowners with mortgages option theoiy predicts that mortgage prepayment or default will be exercised if the call or put option is in the money by some specific amount our analysis tests the extent to which the option approach can explain default and prepayment behavior evaluates the practical importance of modeling both options simultaneouisly and models the unobserved heterogeneity of borrowers in the home mortgage market the paper presents a uinified model of the competing risks of mortgage termination by prepayment and default considering the two hazards as dependent competing risks that are estimated jointly it also accounts for the unobserved heterogeneity among borrowers and estimates the unobserved heterogeneity simultaneously with the parameters and baseline hazards associated with prepayment and default functions our results show that the option model in its most straightfolward version does a good job of explaininig default and prepayment but it is not enouigh by itself the simultaneity of the options is very important empirically in explaining behavior the results also show that there exists significant heterogeneity among mortgage borrowers ignoring this heterogeneity results in serious errors in estimating the prepayment behavior of homeowners

an economic theory of planned obsolescence planned obsolescence is the production of goods with uneconomically short useful lives so that customers will have to make repeat purchases however rational customers will pay for only the present value of the future services of a product therefore profit maximization seemingly implies producing any given flow of services as cheaply as possible with production involving efficient useful lives this paper shows why this analysis is incomplete and therefore incorrect monopolists are shown to desire uneconomically short useful lives for their goods oligopolists have the monopolist s incentive for short lives as well as a second incentive that may either increase or decrease their chosen durability however oligopolists can generally gain by colluding to reduce durability and increase rentals relative to sales some evidence is presented that appears to be generally consistent with the predictions of the theory

market structure and the durability of goods a basic proposition in microeconomics is that a monopolist tends to produce less output than would be produced by a competitive industry with this proposition in mind it is tempting to suggest that monopolistic producers of durable goods will produce goods with less durability than would be produced by a competitive industry this result was derived by martin 1962 kleiman and ophir 1966 levhari and srinivasan 1969 and schmalensee 1970 however swan 1970 showed that monopolists would choose the same degree of durability for their goods as would competitive producers the reason that earlier writers had reached a different result was that they had focused on long run equilibrium profits and ignored the role of initial conditions in optimizing decisions the swan independence result that durability is independent of market structurewas first derived under the assumption of constant returns to scale specifically the average cost of production was assumed to be an increasing function of durability but independent of the level of output the constant returns to scale assumption was first relaxed by sieper and swan 1973 by introducing a fixed capacity cost they showed that with finitely lived capacity which required replacement the independence result continued to hold in the very long run although market structure could affect durability before attainment of long run equilibrium no systematic results were derived kamien and schwartz 1974 introduced rising average cost curves and resurrected the result of earlier writers that a monopolist would choose a lower durability than competitive firms however swan 1977 pointed out that the kamien schwartz analysis is flawed by not allowing the monopolist access to the same technology as the competitive industry if the monopolist is allowed to choose the optimal number of plants then swan s independence result holds finally auernheimer and saving 1977 introduced costs of adjusting the rate of output and the durability of output they showed that if long run increasing costs arise from pecuniary external diseconomies then the independence result is preserved as remarked by schmalensee 1979 in his survey the general message of

information and bank credit allocation abstract private information obtained by lenders leads to borrower capture to the extent that such information cannot be communicated credibly to outsiders we analyze how this capture affects the loan portfolio allocation of informed lenders first we show that banks charge higher interest rates and finance relatively less creditworthy borrowers in market segments with greater information asymmetries second when faced with greater competition from outside lenders banks reallocate credit toward more captured borrowers flight to captivity third if borrower quality and captivity are sufficiently correlated an increase in the competitiveness of uninformed lenders can worsen the informed lender s overall loan portfolio the model explains observed consequences of financial liberalizations

observing unobservables identifying information asymmetries with a consumer credit field experiment information asymmetries are important in theory but difficult to identify in practice we estimate the presence and importance of hidden information and hidden action problems in a consumer credit market using a new field experiment methodology we randomized 58 000 direct mail offers to former clients of a major south african lender along three dimensions i an initial offer interest rate featured on a direct mail solicitation ii a contract interest rate that was revealed only after a borrower agreed to the initial offer rate and ii a dynamic repayment incentive that was also a surprise and extended preferential pricing on future loans to borrowers who remained in good standing these three randomizations combined with complete knowledge of the lender s information set permit identification of specific types of private information problems our setup distinguishes hidden information effects from selection on the offer rate via unobservable risk and anticipated effort from hidden action effects via moral hazard in effort induced by actual contract terms we find strong evidence of moral hazard and weaker evidence of hidden information problems a rough estimate suggests that perhaps 13 to 21 of default is due to moral hazard asymmetric information thus may help explain the prevalence of credit constraints even in a market that specializes in financing high risk borrowers

screening peers softly inferring the quality of small borrowers this paper examines the performance of new online lending markets that rely on nonexpert individuals to screen their peers creditworthiness we find that these peer lenders predict an individual s likelihood of defaulting on a loan with 45 greater accuracy than the borrower s exact credit score unobserved by the lenders who only see a credit category moreover peer lenders achieve 87 of the predictive power of an econometrician who observes all standard financial information about borrowers screening through soft or nonstandard information is relatively more important when evaluating lower quality borrowers our results highlight how aggregating over the views of peers and leveraging nonstandard information can enhance lending efficiency this paper was accepted by amit seru finance

an empirical analysis of personal bankruptcy and delinquency this article uses a new dataset of credit card accounts to analyze credit card delinquency personal bankruptcy and the stability of credit risk models we estimate duration models for default and assess the relative importance of different variables in predicting default we investigate how the propensity to default has changed over time disentangling the two leading explanations for the recent increase in default rates a deterioration in the risk composition of borrowers versus an increase in borrowers willingness to default due to declines in default costs even after controlling for risk composition and economic fundamentals the propensity to default significantly increased between 1995 and 1997 standard default models missed an important time varying default factor consistent with a decline in default costs debt issued by consumers is an understudied asset class there has been particularly little academic study of recent trends in default on this debt between 1994 and 1997 the number of personal bankruptcy filings in the united states rose by about 75 the 1 35 million filings in 1997 represented well over 1 of u s households delinquency rates on credit cards rose almost as sharply federal reserve bank of cleveland 1998 the resulting losses to lenders amounted to a sizable fraction of the interest payments they collect potentially raising the average cost of credit these trends in default both in bankruptcy and delinquency are especially surprising in light of the strong economy over the period they provide an unusually rich source of variation to test the stability of models that forecast personal default and of credit risk models more generally there are two leading explanations for these trends first the risk composition of borrowers might have worsened under the risk effect less

collateral and competitive equilibria with moral hazard and private information the authors examine equilibrium credit contracts and allocations under different competitivity specifications and explain the economic roles of collateral under these specifications both moral hazard and adverse selection are considered the principal message is that how a competitive equilibrium is conceptualized significantly affects the characterization of equilibrium credit contracts specifically some well known results in the rationing literature are shown to rest delicately on the adopted equilibrium concept two somewhat surprising results emerge first high quality borrowers with unlimited collateral may be priced out of the market despite the bank having idle deposits second high quality borrowers may put up more collateral this paper explores the allocational consequences of alternative credit market competitivity specifications and explains the different economic roles of collateral under these specifications we model banks that lend to borrowers financing projects with payoffs depending on a priori unknown borrower attributes and ex post unobservable borrower actions borrowers are assumed to have unconstrained access to collateral our analysis is based on two concepts of competitive equilibrium under both banks compete in the sense that they earn zero expected profits however under the first concept of equilibrium ti as in jaffee and russell 11 all rents accrue to borrowers whereas under the second concept t2 all rents accrue to depositors as in stiglitz and weiss 17 our research makes two main points first we demonstrate that the manner in which a competitive equilibrium is conceptualized importantly influences the characterization of equilibrium credit allocations specifically one of the findings is that the rationing equilibria of stiglitz and weiss 17 and others should be viewed as rather delicate things in that they are very sensitive to the competitivity specification used for instance

the role of soft information in a dynamic contract setting evidence from the home equity credit market credit underwriting is a dynamic process involving multiple interactions between borrower and lender during this process lenders have the opportunity to obtain hard and soft information from the borrower we analyze more than 108 000 home equity loans and lines of credit applications to study the role of soft and hard information during underwriting our data set allows us to distinguish lender actions that are based strictly on hard information from decisions that involve the collection of soft information our analysis confirms the importance of soft information and suggests that its use can be effective in reducing overall portfolio credit losses ex post

distance and private information in lending we study the effects of physical distance on the acquisition and use of private information in informationally opaque credit markets using a unique data set of all loan applications by small firms to a large bank we show that borrower proximity facilitates the collection of soft information leading to a trade off in the availability and pricing of credit which is more readily accessible to nearby firms albeit at higher interest rates ceteris paribus analyzing loan rates and firms decision to switch lenders provides further evidence for banks strategic use of private information however distance erodes our lender s ability to collect proprietary intelligence and to carve out local captive markets suggesting that the requisite soft information is primarily local the author 2010 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

flexible parametric estimation of duration and competing risk models in this paper we specify and estimate a flexible parametric proportional hazards model the model specification is flexibly parametric in the sense that the baseline hazard is non parametric while the effect of the covariates takes a particular functional form we also add parametric heterogeneity to the underlying hazard model specification we specify a flexible parametric proportional competing risks model which permits unrestricted correlation among the risks unemployment duration data are then analysed using the flexible parametric duration and competing risks specifications we find an important effect arising from the exhaustion of unemployment insurance and significantly different hazards for the two types of risks new jobs and recalls

adverse selection in insurance markets policyholder evidence from the u k annuity market in this paper we investigate the importance of adverse selection in insurance markets we use a unique data set consisting of all annuity policies sold by a large u k insurance company since the early 1980s to analyze mortality differences among individuals who purchased different types of policies we find systematic relationships between ex post mortality and annuity policy characteristics such as whether the annuity will make payments to the estate in the event of an untimely death and whether the payments from the annuity rise over time these mortality patterns are consistent with the presence of asymmetric information in the annuity market we find no evidence of substantive mortality differences however across annuities of different size even though models of insurance market equilibrium with asymmetric information would predict such differences we also find that the pricing of various features of annuity contracts is consistent with the self selection patterns we find in mortality rates our results therefore suggest that selection may occur across many specific features of insurance contracts and that the absence of selection on one contract dimension does not preclude its presence on others this highlights the importance of considering the detailed features of insurance contracts when testing theoretical models of asymmetric information

the dynamic adjustment of optimal durability and quality they don t make them like they used to is a well known adage which is investigated in this paper we show that when the marginal cost with respect to durability or quality per unit of production does not increase with production then a a competitive firm and a monopolist will choose an optimal durability or quality path that decreases over time b the more likely it is that quality and quantity are substitutes either in consumption or production the more likely it is that quality will deteriorate over time as the market approaches the steady state c substitutability of quality and durability will tend to drive quality down even faster when durability declines

one is almost enough for monopoly it has been argued that two factors product durability and potential entry may force a monopolist to price at marginal cost this article shows that when these two forces coexist the tendency toward competition may be negated first we prove that durable goods oligopolists without commitment powers may attain joint profits arbitrarily close to those of a monopolist with perfect commitment power second we demonstrate that the presence of a potential entrant may enable a durable goods monopolist to act as if he had commitment power thus potential as well as actual entry may restore monopoly power

monetary policy and bubbles in the national and regional uk housing markets numerous studies have explained the significant correlation between monetary policies and asset pricing bubbles this study uses data on the overall uk housing market and the five uk regions with the highest house prices to evaluate the correlation between monetary policies and pricing bubbles in the uk housing markets this study uses a theoretical model to verify whether monetary policies affect asset pricing bubbles fluctuations in house prices are classified into fluctuations related to fundamentals the mean reversion behaviour and responses to information in the current period and fluctuations unrelated to fundamentals self related behaviour after estimating the fluctuation behaviour of house prices through quantile regression this study asserts that a monetary easing environment can significantly increase housing returns the self related phenomenon of asset returns has increased significantly and has thus continuously increased prices and formed a bubble

the dynamic connectedness of uk regional property returns in this study we examine the network topology of uk regional property returns over the period 1973q4 2014q4 using a dynamic measure of connectedness developed by diebold and yilmaz 2014 overall

optimal management of environmental externalities with time lags and uncertainty many environmental externalities occur with time lags that can range from a few days to several centuries in length and many of these externalities are also subject to uncertainty in this paper we examine the key features of an optimal policy to manage environmental externalities that are both lagged and stochastic we develop a two period two polluter model and obtain closed form solutions for optimal emissions levels under different combinations of damage functions and stochastic processes these solutions show that it is not obvious whether greater control should be exerted on polluters that generate externalities with longer lags or on polluters that generate externalities with shorter lags we find that the optimal ranking of polluters with respect to the length of the time lag associated with their externality will depend on a the discount rate b conditional expectations of future states of the polluted resource c persistence of the pollutant and d initial conditions

information sharing in credit markets we present a model with adverse selection where information sharing between lenders arises endogenously lenders incentives to share information about borrowers are positively related to the mobility and heterogeneity of borrowers to the size of the credit market and to advances in information technology such incentives are instead reduced by the fear of competition from potential entrants in addition information sharing increases the volume of lending when adverse selection is so severe that safe borrowers drop out of the market these predictions are supported by international and historical evidence in the context of the consumer credit market a large body of literature on credit markets has shown that asymmetric information may prevent the efficient allocation of lending leading to credit rationing e g jaffee and russell 1976 stiglitz and weiss 1981 or to a wedge between lending and borrowing rates e g king 1986 in this literature informational asymmetries are taken to be exogenous lenders fail to observe some relevant characteristic or action of potential borrowers and have no way of learning about it in some countries however lenders can improve their knowledge about new customers by exchanging information with other lenders through information brokers generally known as credit bureaus the latter collect file and distribute the information voluntarily supplied by their members and operate on the principle of reciprocity lenders who do not provide data are denied access to the bureau s files in other countries instead these institutions do not exist the literature offers no guide to identify the factors that lead to endogenous communication between lenders this paper is an attempt to fill the gap information sharing is important for a number of reasons it may increase the degree of competitiveness within credit markets vives 1990 improve

the failure of competition in the credit card market the bank credit card market containing 4 000 firms and lacking regulatory barriers casually appears to be a hospitable environment for the model of perfect competition nevertheless this article reports that credit card interest rates have been exceptionally sticky relative to the cost of funds moreover major credit card issuers have persistently earned from three to five times the ordinary rate of return in banking during the periods 1983 88 the failure of the competitive model appears to be partly attributable to consumers making credit card choices without taking account of the very high probability that they will pay interest on their outstanding balances copyright 1991 by american economic association

the influence of contract prices and relationships on appraisal bias abstract a new measure is introduced to analyze the mechanism and extent of appraisal bias of residential property the primary source of bias identified is in the weights appraisers assign to selected comparable transactions after adjusting for observable attributes this unequal weighting results in an additional 23 of appraised values being at least equal to contract price appraisers were also more likely to bias appraised values for the properties associated with loan officers and real estate brokers they worked with more frequently these findings offer insights into how appraisers confirmed ever increasing prices leading in to the housing market crash and subsequent great recession

soft information in insurer lending and reinsurance under capital regulation the paper develops a capped call option framework explicitly integrating the borrowing firm credit risk moreover modelling the structural breaks in assets and volatility captures soft informatio

asymmetric information collateral and moral hazard in a credit market characterized by a priori asymmetric information collateral not only can identify credit applicants but also can result in moral hazard involving the borrower s use of pledged assets the borrower s other alternatives are to apply for unsecured bank credit and be priced as average or to acquire financing by selling an asset and subsequently renting it for continued use the optimal secured loan contract for higher quality firms is shown to involve overcollateralization there is underinvestment relative to first best in maintenance of the pledged assets but overinvestment relative to the level that would be chosen without bank monitoring self financing and unsecured credit are chosen by the intermediate and lowest quality groups respectively

the benefits of lending relationships evidence from small business data this paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm we analyze data collected in a survey of small firms by the small business administration the primary benefit of building close ties with an institutional creditor is that the availability of financing increases we find smaller effects on the price of credit attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit in sum relationships are valuable and appear to operate more through quantities rather than prices

switching costs and adverse selection in the market for credit cards new evidence abstract to explain persistence of credit card interest rates at relatively high levels calem and mester aer 1995 argued that informational barriers create switching costs for high balance customers as evidence using data from the 1989 survey of consumer finances they showed that these households were more likely to be rejected when applying for new credit in this paper we revisit the question using the 1998 and 2001 scf further we use new information on card interest rates to test for pricing effects consistent with information based switching costs we find that informational barriers to competition persist although their role may have declined

information from relationship lending evidence from loan defaults in china using a proprietary database from a large chinese state owned bank we examine whether information evolved from banking relationships predicts commercial loan default by industrial firms we find that the bank s relationship information is significantly linked to the incidence of default and that its contribution to prediction accuracy is larger than any hard information furthermore the effect of relationship information is stronger among firms that have a more sustained banking relationship our findings indicate that at least in the emerging markets a bank s relationship information still matters for large firms despite the fact that hard information for such firms is abundant

unemployment insurance rules joblessness and part time work developed and under general conditions an increase in the disregard is shown to increase both the part time and overall re employment hazards data from the current population survey s displaced worker supplements are used to test these predictions estimates from a competing risks model with correlated risks and time varying coefficients shows that increasing the disregard significantly increases the conditional probability of part time re employment during the first three months of joblessness