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The role of «perceived loss» aversion on credit screening: An experiment
Spanish Journal of Finance and Accounting
A major characteristic of credit markets is information asymmetry. To combat its problems, as credit rationing, principals can use a menu of contracts to screen clients with different risk level. We conduct a laboratory experiment to address an important question for such settings -does the framing of the offered menu of contracts interfere with the self-selection mechanism? The answer is yes. We fi nd subjects' choices shift when the same (positive) outcomes of the same menu of contracts aredoi:10.1080/02102412.2013.10779741 fatcat:dsgv5sgbrrhwjam4jfhhepyhpu