Endogenous communication among lenders and entrepreneurial incentives

If banks have an informational monopoly about their clients,borrowers may curtail their effort level for fear of being exploitedvia high interest rates in the future. Banks can correct thisincentive problem by committing to share private informationwith other lenders. The fiercer competition triggered by informationsharing lowers future interest rates and future profits of banks.But, provided banks retain an initial informational advantage,their current profits are raised by the borrowers' higher effort.This trade-off determines the banks' willingness to share information.Their decision affects credit market competition, interest rates,volume of lending, and social welfare.     

Assessing the productivity consequences of agri-environmental practices when adoption is endogenous

Journal of Productivity Analysis - We address the general problem of selection bias, an issue endemic to policy analysis when adoption is voluntary, with an empirical application to environmental...