Measuring the welfare cost of asymmetric information in consumer credit markets

• 成果类型: Article
• 署名作者: DeFusco, Anthony A.; Tang, Huan; Yannelis, Constantine
• 署名单位: Northwestern University; University of London; London School Economics & Political Science; University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.09.001
• 发表日期: 2022
• 页码: 821-840
• 关键词: Asymmetric information; welfare; Consumer credit; FinTech; experiment

摘要

Information asymmetries are known in theory to lead to inefficiently low credit provi-sion, yet empirical estimates of the resulting welfare losses are scarce. This paper leverages a randomized experiment conducted by a large fintech lender to estimate welfare losses arising from asymmetric information in the market for online consumer credit. Building on methods from the insurance literature, we show how exogenous variation in interest rates can be used to estimate borrower demand and lender cost curves and recover implied wel-fare losses. While asymmetric information generates large equilibrium price distortions, we find only small overall welfare losses, particularly for high-credit-score borrowers.(c) 2022 Elsevier B.V. All rights reserved.