Publications

Publications

Screening Peers Softly: Inferring the Quality of Small Borrowers

An important challenge for financial markets is understanding how to best screen borrowers when allocating credit. Predicting borrower creditworthiness is understandably hard. Whether a person defaults on a loan is not just the result of a mechanical financial calculus but is also driven by the complexities and idiosyncrasies of human behavior. Even when facing an identical financial situation, individuals may vary in their ability and willingness to meet their financial obligations.

 

 

Equity