To screen or not to screen? Let the competition decide
Nikolaos Papanikolaou ()
Economics Letters, 2018, vol. 170, issue C, 175-178
We develop a model of spatial competition to explore how changes in the market structure affect the incentives of banks to screen loan applicants. We take a post-crisis perspective that treats the number of banks as exogenous. Our findings reveal that the relaxation of competition distorts banks’ incentives to invest in screening.
Keywords: Financial crisis; Bank competition; Market structure; Screening (search for similar items in EconPapers)
JEL-codes: D40 D82 G21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:170:y:2018:i:c:p:175-178
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