Personal bankruptcy : is it enough to forgive or must we also forget?
American economic journal : microeconomics, 2015, Vol. 7, No. 4, pp. 294-338
ELUL, Ronel, GOTTARDI, Piero, Personal bankruptcy : is it enough to forgive or must we also forget?, American economic journal : microeconomics, 2015, Vol. 7, No. 4, pp. 294-338 - https://hdl.handle.net/1814/38587
Retrieved from Cadmus, EUI Research Repository
In many countries, lenders are restricted in their access to information about borrowers' past defaults. We study this provision in a model of repeated borrowing and lending with moral hazard and adverse selection. We analyze its effects on borrowers' incentives and credit access, and identify conditions under which it is welfare improving. Our model's predictions are consistent with the evidence on the impact of these credit bureau regulations on borrowers' and lenders' behavior as well as on credit provision. We also show that "forgetting" must be the outcome of a regulatory intervention.
Cadmus permanent link: https://hdl.handle.net/1814/38587
Full-text via DOI: 10.1257/mic.20130139
ISSN: 1945-7669; 1945-7685
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