Corpus ID: 26718172

Competition and Strategic Information Acquisition in Credit Markets

@inproceedings{Carey2006CompetitionAS,
  title={Competition and Strategic Information Acquisition in Credit Markets},
  author={W. P. Carey},
  year={2006}
}
  • W. P. Carey
  • Published 2006
  • We investigate the interaction between banks’ use of information acquisition as a strategic tool and their role in promoting the efficiency of credit markets when a bank’s ability to gather information varies with its distance to the borrower. We show that banks acquire proprietary information both to soften lending competition and to extend their market share. As competition increases, investments in information acquisition fall, leading to lower interest rates but also to less efficient… CONTINUE READING
    37 Citations

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