Bankruptcy: Is It Enough to Forgive or Must We Also Forget?

Ronel Elul and Piero Gottardi

American Economic Journal: Microeconomics, 2015, vol. 7, issue 4, 294-338

Abstract: 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. (JEL D14, D82, G33, K35, L26)

JEL-codes: D14 D82 G33 K35 L26 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/mic.20130139
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Citations: View citations in EconPapers (37)

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Related works:
Working Paper: Bankruptcy: is it enough to forgive or must we also forget? (2011)
Working Paper: Bankruptcy: Is it enough to Forgive or must we also Forget? (2008)
Working Paper: Bankruptcy: Is It Enough to Forgive or Must We Also Forget? (2008)
Working Paper: Bankruptcy: Is it enough to forgive or must we also forget? (2007)
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