Credit Markets with Asymmetric Information

Ch. 0: Introduction and General Overview.- 0.1 Subject and Scope.- 0.2 Summary of Contents.- Ch. 1: Approaches to Equilibrium Credit Rationing.- 1.1 A General Description of a Credit Market.- 1.2 Definition of Credit Rationing.- 1.3 Borrowers With Different Wealth Endowments.- 1.4 The Role of the Horizontal Integration of the Banking Firm.- 1.5 Implicit Contracts and Credit Rationing.- 1.6 Concluding Remarks.- Ch. 2: Adverse Selection, Moral Hazard, and Credit Rationing.- 2.1 The Basic Model.- 2.2 Projects of Different Riskiness.- 2.3 Borrowers of Different Honesty.- 2.4 Borrowers With Different Abilities.- 2.5 Unobservable Effort of Borrowers.- 2.6 Concluding Remarks.- Ch. 3: Credit Rationing in Multi-Period Models.- 3.1 Overview.- 3.2 Rationing as an Incentive Device.- 3.3 Experience Rating of Borrowers.- 3.4 Rationing With Endogenous Costs of Default.- 3.5 Bankruptcy as a Joint Decision of Bank and Borrower.- 3.6 Concluding Remarks.- Ch. 4: Screening vs. Rationing. The Role of Collateral.- 4.1 Overview.- 4.2 Projects of Different Riskiness.- 4.3 The Jaffee and Russell Model.- 4.4 Borrowers With Different Abilities.- 4.5 Borrowers With Unobservable Effort.- 4.6 Concluding Remarks.- Ch. 5: Loan Markets With Perfectly Divisible Projects.- 5.1 Overview.- 5.2 A Loan Market With Certain Returns.- 5.3 A Loan Market With Uncertain Returns.- 5.4 The Nash-Equilibrium With Borrowers of Different Abilities.- Ch. 6: Variable Loan Size, Signalling and Endogenous Information.- 6.1 Overview.- 6.2 Success-Failure Projects and Different Abilities.- 6.3 Strategic Stability of Credit Market Equilibria.- 6.4 Projects of Different Riskiness.- 6.5 Borrowers With Different Default Costs.- 6.6 Exchange of Information Between Banks.- 6.7 Concluding Remarks 173 Appendix.- Ch. 7: Variable LoanSize and Type II Rationing.- 7.1 Overview.- 7.2 The Basic Model.- 7.3 Loan Applicants With Different Default Costs.- 7.4 Loan Applicants With Different Abilities.- 7.5 Projects of Different Riskiness.- 7.6 The Role of Effort.- 7.7 Concluding Remarks.- Ch. 8: Epilogue: Whither Now.