| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w27341 |
| 来源ID | Working Paper 27341 |
| Searching for Approval | |
| Sumit Agarwal; John Grigsby; Ali Hortaçsu; Gregor Matvos; Amit Seru; Vincent Yao | |
| 发表日期 | 2020-06-08 |
| 出版年 | 2020 |
| 语种 | 英语 |
| 摘要 | We study the interaction of search and application approval in credit markets. We combine a unique dataset, which details search behavior for a large sample of mortgage borrowers, with loan application and rejection decisions. Our data reveal substantial dispersion in mortgage rates and search intensity, conditional on observables. However, in contrast to predictions of standard search models, we find a novel non-monotonic relationship between search and realized prices: borrowers, who search a lot, obtain more expensive mortgages than borrowers' with less frequent search. The evidence suggests that this occurs because lenders screen borrowers' creditworthiness, rejecting unworthy borrowers, which differentiates consumer credit markets from other search markets. Based on these insights, we build a model that combines search and screening in presence of asymmetric information. Risky borrowers internalize the probability that their application is rejected, and behave as if they had higher search costs. The model rationalizes the relationship between search, interest rates, defaults, and application rejections, and highlights the tight link between credit standards and pricing. We estimate the parameters of the model and study several counterfactuals. The model suggests that “overpayment” may be a poor proxy for consumer unsophistication since it partly represents rational search in presence of rejections. Moreover, the development of improved screening technologies from AI and big data (i.e., fintech lending) could endogenously lead to more severe adverse selection in credit markets. Finally, place based policies, such as the Community Reinvestment Act, may affect equilibrium prices through endogenous search responses rather than increased credit risk. |
| 主题 | Financial Economics ; Financial Institutions ; Industrial Organization |
| URL | https://www.nber.org/papers/w27341 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/585012 |
| 推荐引用方式 GB/T 7714 | Sumit Agarwal,John Grigsby,Ali Hortaçsu,et al. Searching for Approval. 2020. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w27341.pdf（1773KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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