Asymmetric Information and Credit Rationing in a Model of Search

Cemil Selcuk

No E2024/25, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: This paper presents a competitive search model focusing on the impact of asymmetric information on credit markets. We show that limited entry by lenders results in endogenous credit rationing, which, in turn, plays a key role in managing adverse selection and prevents the credit market from collapsing.

Keywords: Asymmetric Information; Credit Rationing; Directed Search (search for similar items in EconPapers)
JEL-codes: D43 D82 G20 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2024-12
New Economics Papers: this item is included in nep-com, nep-fdg and nep-mic
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Journal Article: Asymmetric Information and Credit Rationing in a Model of Search (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2024/25

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