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Competition in Credit Markets: A Theoretic Analysis

by Michael Tröge
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Current price ₹3,672.00
Original price ₹5,649.00
Original price ₹5,649.00
Original price ₹5,649.00
(-35%)
₹3,672.00
Current price ₹3,672.00

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Book cover type: Paperback
  • ISBN13: 9783824490486
  • Binding: Paperback
  • Subject: N/A
  • Publisher: Springer
  • Publisher Imprint: Deutscher Universitatsverlag
  • Publication Date:
  • Pages: 117
  • Original Price: EUR 49.99
  • Language: English
  • Edition: 2001
  • Item Weight: 180 grams
  • BISAC Subject(s): Finance / General, Game Theory, and Probability & Statistics / General

From the Back Cover
Competition in credit markets is different from competition in simple product markets. The allocation of capital is not only determined by its price, but banks actively decide to whom they will provide finance. In addition, the provision of credit is not a spot transaction, but extends over a certain period of time. Banks need to acquire information in order to efficiently screen borrowers before providing credit and to monitor them during the credit relationship to make sure that the credit will be paid back.

Michael Tröge develops game-theoretic and auction-theoretic models for the strategic interaction of banks in the credit market. He shows that in narrow oligopolies only one bank will carry out detailed creditworthyness tests for a firm and that in very competitive markets information about a borrower´s quality can reduce a bank´s profit. The author also points out that equity ownership of a bank increases the expected interest rates for a firm and that a bank´s concern for a good reputation may lead to credit rationing.

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Dr. Michael Tröge promovierte bei Prof. Dr. Dr. h.c. mult. Horst Albach am Institut für Unternehmenstheorien und -politik der Humboldt-Universität zu Berlin. Er ist derzeit als Dozent an der ESCP-EAP / European School of Management Paris tätig.

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