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Imperfect Competition In Auto Lending: Subjective Markup, Racial Disparity, & Class Action Litigation, Mark A. Cohen
Imperfect Competition In Auto Lending: Subjective Markup, Racial Disparity, & Class Action Litigation, Mark A. Cohen
Mark A Cohen
While the market for auto lending at first appears to be highly competitive, many consumers lack the ability to obtain accurate information about price. In many markets, uninformed consumers can “free ride” off the knowledge of informed consumers. However, the market for auto lending differs from traditional markets because price ultimately depends upon both the credit worthiness of the individual borrower and the details of the auto loan (e.g. term length, payment-to-income ratio, etc.). Auto dealers in this market act as agents of both consumers (identifying suitable auto lenders) and auto lenders (identifying prospective borrowers). Given the asymmetric information about …
Imperfect Competition In Auto Lending: Subjective Markup, Racial Disparity, And Class Action Litigation, Mark A. Cohen
Imperfect Competition In Auto Lending: Subjective Markup, Racial Disparity, And Class Action Litigation, Mark A. Cohen
Mark A Cohen
While the market for auto lending at first appears to be highly competitive, many consumers lack the ability to obtain accurate information about price. In many markets, uninformed consumers can “free ride” off the knowledge of informed consumers. However, the market for auto lending differs from traditional markets because price ultimately depends upon both the credit worthiness of the individual borrower and the details of the auto loan (e.g. term length, payment-to-income ratio, etc.). Auto dealers in this market act as agents of both consumers (identifying suitable auto lenders) and auto lenders (identifying prospective borrowers). Given the asymmetric information about …