Monopoly and Information Advantage in the Residential Mortgage Market
研究垄断贷款机构如何利用信息优势阻止竞争者进入，通过区分优质和次级贷款市场并提高优质借款人利率来维持垄断地位，并用美国数据验证了模型预测。
Information advantage and entry deterrence incentives are investigated as they affect lending outcomes and competitive structure of the U.S. residential mortgage market. In the model, when assessing a loan applicant, the incumbent monopoly lender employs a proprietary screening technology to produce a privately observed estimate of loan credit quality. When faced with potential competitive entry, the incumbent signals poor credit quality by charging high prices to higher quality borrowers. Market structure and loan pricing strategy are derived endogenously, where the incumbent deters entry by first segmenting consumers into prime and sub-prime loan markets and second by charging prime market borrowers a uniform rate that is higher than the risk-based monopoly rate. Empirical implications of the model are identified, and evidence is presented that is consistent with predictions. 1 The U.S. residential mortgage market represents close to 30 percent of the nation’s total credit market. The structure of this market has received considerable attention in recent years, with much of the focus on Fannie Mae and Freddie Mac. Over the years these two Government Sponsored