Asymmetric Dominance and Its Impact on Mortgage Default Deficiency Collection Efforts
研究对冲基金和私募股权追债公司如何利用非对称支配理论，通过引入“诱饵”付款选项改变借款人的偏好，并发现左位数字效应能缓解这种影响，同时揭示不同人群对无关选项独立性公理的违背差异。
Abstract The surge in mortgage default rates during the financial crisis has led to a corresponding dramatic increase in the type and number of firms who are entering the deficiency collection space. As such, we study the methods by which hedge funds and private equity collection firms can more profitably unwind this toxic debt. Specifically, we employ the theory of Asymmetric Dominance and find support that introducing a similar payment amount (i.e., a “decoy”) significantly induces borrowers to change their preference from one that is optimal for them to one that is suboptimal. We then employ the Left‐Most Digit effect in a new manner and demonstrate a statistically significant ability to mitigate the Asymmetric Dominance effect. Finally, we empirically find that Caucasians, males, and those of a greater net worth are more adept at avoiding violating the Independence of Irrelevant Alternatives axiom.