Misuse and non-use of information acquisition technologies in banking

Arbeitspapier

In a model of bank lending characterized by asymmetric information, we show that banks may misuse the availability of an interim monitoring technology to soften price competition, even though the borrowers face no moral hazard problem. The interim monitoring technology can also be used to alleviate adverse selection. The equilibria that emerge resemble those in vertical product differentiation models. We also show that a bank may decide not to use a costless and perfect ex-ante screening technology.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ETLA Discussion Papers ; No. 823

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Corporate Finance and Governance: General ; Information and Product Quality; Standardization and Compatibility
• Subject: adverse selection ; banking ; ex-ante screening ; interim monitoring ; vertical differentiation ; Adverse Selection ; Signalling ; Produktdifferenzierung ; Banking-Schule

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hyytinen, Ari ; Toivanen, Otto
• Event: Veröffentlichung
• (who): The Research Institute of the Finnish Economy (ETLA)
• (where): Helsinki
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/63962
• Last update: 10.03.2025, 11:43 AM CET