Template-type: ReDIF-Paper 1.0
Author-Name: Martin Brown
Author-Name-First: Martin
Author-Name-Last: Brown
Author-Person: pbr129
Author-Name: Christian Zehnder
Author-Name-First: Christian
Author-Name-Last: Zehnder
Author-Person: pze32
Title: The Emergence of Information Sharing in Credit Markets
Abstract: We examine 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, ecause borrowers may exogenously switch locations. Lenders are, however, engaged in spatial competition, and thus may 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. Competition between lenders reduces information sharing, but the impact of competition seems to be only of second order importance.
Length: 53 pages
Creation-Date: 2008
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2008/working_paper_2008_01
File-Format: text/html
Number: 2008-01
Classification-JEL: D82, G21, G28
Keywords: information sharing, credit, competition, asymmetric information
Handle: RePEc:snb:snbwpa:2008-01