2026-04-14T05:28:21Zhttps://recercat.cat/oai/request

oai:recercat.cat:10230/117152025-12-22T02:17:02Zcom_2072_6col_2072_452953

Adverse selection, credit and efficiency : the case of the missing market Martin, Alberto, 1974- adverse selection credit markets collateral monitored lending screening Macroeconomics and International Economics We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom rests on one implicit assumption: entrepreneurs can only access monitored lending. If a new set of markets is added to provide entrepreneurs with additional funds, efficiency can be attained in equilibrium. An important characteristic of these additional markets is that lending in them must be unmonitored, in the sense that it does not condition total borrowing or investment by entrepreneurs. This makes it possible to attain efficiency by pooling all entrepreneurs in the new markets while separating them in the markets for monitored loans. 2017-07-26T10:50:14Z 2017-07-26T10:50:14Z 2010-12-01 2017-07-23T02:13:43Z info:eu-repo/semantics/workingPaper Economics and Business Working Papers Series; 1257 L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons http://creativecommons.org/licenses/by-nc-nd/3.0/es/ info:eu-repo/semantics/openAccess