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The Emergence of Information Sharing in Credit Markets
Journal
Journal of Financial Intermediation
ISSN
1042-9573
ISSN-Digital
1096-0473
Type
journal article
Date Issued
2010-04
Author(s)
Zehnder, C.
Abstract
We provide the first systematic empirical analysis of how asymmetric information and competition in the credit market affect voluntary information sharing between lenders. We study an experimental credit market in which information sharing can help lenders to distinguish good borrowers from bad ones. Lenders may, however, also lose market power by sharing information with competitors. Our results suggest that asymmetric information in the credit market increases the frequency of information sharing between lenders significantly. Stronger competition between lenders reduces information sharing. In credit markets where lenders may fail to coordinate on sharing information, the degree of information asymmetry, rather than lender competition, drives actual information sharing behavior
Language
English
Keywords
Emergence of Information Sharing
Credit Markets
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
19
Number
2
Start page
255
End page
278
Pages
24
Subject(s)
Eprints ID
72257