Interbank Competition with Costly Screening
We analyze credit market equilibrium when banks screen loan applicants. When banks have a convex cost function of screening, a pure strategy equilibrium exists where banks optimally set interest rates at the same level as their competitors. This result complements Broecker's (1990) analysis, wh...
| Main Authors: | , , , |
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| Format: | Journal article |
| Published: |
2007
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