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Pessimism, optimism and credit rationing [PDF]
, 2006 In their celebrated contribution on credit rationing, Stiglitz and Weiss (1981) showed that the expected return to the borrower on a loan is increasing in the risk of the project it funds. In this paper, I show that their results do not necessarily carry over to the case where the agents' preferences can be described by rank-dependent expected utility (
Jean-Louis ARCAND
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Trade Credit and Credit Rationing
Review of Financial Studies, 1997Asymmetric information between banks and firms can preclude financing of valuable projects. Trade credit alleviates this problem by incorporating in the lending relation the private information held by suppliers about their customers. Incentive compatibility conditions prevent collusion between two of the agents (e.g., the buyer and the seller) against
Biais, Bruno, Gollier, Christian
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Credit Risk and Credit Rationing
The Quarterly Journal of Economics, 1960I. Approaches to credit rationing, 258. — II. The influence of credit risk on loan payoff, 259. — III. Implications for lender behavior and borrower access to credit, 267. — IV. The central bank's influence, 275.
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Credit Rationing and Rational Behavior
Journal of Money, Credit and Banking, 1994This paper shows that optimal consumption is weakly increasing in the borrowing ceiling, while savings and the welfare losses caused by borrowing constraints are weakly decreasing. More important, the strict inequalities may hold even at high saving levels at which the constraints are not expected to bind any time soon. In essence, the paper shows that
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Consumer Rationality and Credit Cards
Journal of Political Economy, 1995Borrowing on credit cards at high interest rates might appear irrational. However, even low transactions costs can make credit cards attractive relative to bank loans. Credit cards also provide liquidity services by allowing consumers to avoid some of the opportunity costs of holding money.
Brito, Dagobert L, Hartley, Peter R
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Credit Rationing and Financial Disorder
The Journal of Finance, 1984ABSTRACTWe develop a model of lender behavior in the presence of default risk and moral hazard that determines default premiums and identifies the conditions under which borrowers are rationed. A hypothesis regarding a cognitive bias in the formation of expectations provides a dynamic component to our analysis and allows us to explain how an economy ...
Guttentag, Jack, Herring, Richard
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Components of credit rationing
Journal of Financial Stability, 2020Abstract Credit rationing by lending institutions has been the subject of much research in recent decades. Although there are some empirical indications, there is little theoretical justification about how various forms of credit rationing manifest themselves in credit markets.
Mehdi Beyhaghi +3 more
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Credit Rationing and Capital Accumulation
Economica, 1991This paper develops a dynamic partial equilibrium analysis of how financial policy affects capital accumulation when bank loans are rationed and subsidized. The underlying specification of intertemporal behavior is critical: loan policy often has qualitatively different effects on capital accumulation in overlapping-generations and infinite-horizon ...
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Credit Rationing: Issues and Questions
Journal of Money, Credit and Banking, 1978THE QUESTION OF CREDIT RATIONING has been the subject of a number of theoretical discussions during the past twenty-five years. Credit rationing arguments occupied an important place in the so-called availability doctrine. The availability doctrine became prominent during the early fifties as a theory explaining how monetary policy could have eSects on
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