Information Acquisition in Competitive Markets: An Application to the US Mortgage Market

• 成果类型: Article
• 署名作者: Burke, Jeremy M.; Taylor, Curtis R.; Wagman, Liad
• 署名单位: RAND Corporation; Duke University; Illinois Institute of Technology
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.4.4.65
• 发表日期: 2012
• 页码: 65-106
• 关键词: default crisis; privacy; ECONOMICS; prices

摘要

How do price commitments impact the amount of information firms acquire about potential customers? We examine this question in the context of a competitive market where firms search for information that may disqualify applicants. Contracts are incomplete because the amount of information acquired cannot be observed. Despite competition, we find that firms search for too much information in equilibrium. If price discrimination is prohibited, members of high-risk groups suffer disproportionately high rejection rates. If rejected applicants remain in the market, the resulting adverse selection can be severe. We apply the results to the US mortgage market. (JEL D82, D83, D86, G21)