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Bankruptcy: Is It Enough to Forgive or Must We Also Forget?

Elul, Ronel and Gottardi, Piero (2015) 'Bankruptcy: Is It Enough to Forgive or Must We Also Forget?' American Economic Journal: Microeconomics, 7 (4). 294 - 338. ISSN 1945-7669

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Abstract

In many countries, lenders are restricted in their access to information about borrowers' past defaults. We study this provision in a model of repeated borrowing and lending with moral hazard and adverse selection. We analyze its effects on borrowers' incentives and credit access, and identify conditions under which it is welfare improving. Our model's predictions are consistent with the evidence on the impact of these credit bureau regulations on borrowers' and lenders' behavior as well as on credit provision. We also show that "forgetting" must be the outcome of a regulatory intervention.

Item Type: Article
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Elements
Date Deposited: 18 Sep 2019 12:40
Last Modified: 18 Sep 2019 12:40
URI: http://repository.essex.ac.uk/id/eprint/25369

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