LEMONS WITH A TWIST: ADVERSE SELECTION AND THE ROLE OF SECURITIZATION IN MORTGAGE MARKET EVOLUTION

Amy Cutts (), Robert A. Van Order and Peter Zorn

ERES from European Real Estate Society (ERES)

Abstract: This paper models the development of the secondary market as a way of trading off its lower cost of securitization with adverse selection due to asymmetric information and high monitoring costs. We use a simple adverse selection model in the tradition of Akerlof (1970) with successive modifications, including licensing contracts similar to those of Leland (1979) and Chan and Leland (1982), to explain the evolution of the secondary market and discuss implications for the future, particularly as information improves.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2000-06-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/oai-eres-id-eres2000-118 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2000_118

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().