Abstract
In this chapter it is investigated how a relaxation of the assumption of an exogenously given amount of collateral may affect the possibility of equilibrium credit rationing as presented in chapter 2. The starting point of the analysis is the stimulating contribution of Bester (1984a) who claimed that “rationing is not viable against competition .... banks will compete by choosing contracts with different collateral requirements and interest rates as a self selection mechanism for borrowers ... In equilibrium no borrower ... is rejected.” (Bester 1984a).
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© 1986 Springer-Verlag Berlin Heidelberg
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Clemenz, G. (1986). Screening vs. Rationing: The Role of Collateral. In: Credit Markets with Asymmetric Information. Lecture Notes in Economics and Mathematical Systems, vol 272. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45614-5_5
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DOI: https://doi.org/10.1007/978-3-642-45614-5_5
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-16778-5
Online ISBN: 978-3-642-45614-5
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