We thank the Nef Foundation and the IGR Foundation for financial support. Financial support from the Agence Nationale de la Recherche (ANR-08-JCJC-0105–01, “CONFLICT” project) is also gratefully acknowledged. We are indebted to Elven Priour for programming the experiment. We also thank Monica Capra, Irene Comeig, and participants at the 2008 ESA meetings for their helpful comments.
Credit Relationships: Evidence from Experiments with Real Bankers
Article first published online: 26 JUL 2012
© 2012 The Ohio State University
Journal of Money, Credit and Banking
Volume 44, Issue 5, pages 957–980, August 2012
How to Cite
CORNÉE, S., MASCLET, D. and THENET, G. (2012), Credit Relationships: Evidence from Experiments with Real Bankers. Journal of Money, Credit and Banking, 44: 957–980. doi: 10.1111/j.1538-4616.2012.00517.x
Simon Cornée is an Assistant Professor at CREM (CNRS–University of Rennes 1), Faculté de Sciences Economiques et IGR (E-mail: firstname.lastname@example.org). David Masclet is a Research Associate Professor at CREM (CNRS–University of Rennes 1) and CIRANO (Montreal), Faculté de Sciences Economiques (E-mail: email@example.com). Gervais Thenet is Professor of Management Sciences at IGR (University Rennes 1) (E-mail: firstname.lastname@example.org).
- Issue published online: 26 JUL 2012
- Article first published online: 26 JUL 2012
- Received June 2, 2009; and accepted in revised form November 8, 2011.
- experimental economics;
- credit market;
- relationship lending;
We experimentally examine to what extent long-term “lender–borrower” relationships mitigate moral hazard. The originality of our research lies in recruiting not only students but also commercial and social bankers. The opportunity to engage in bilateral long-term relationships mitigates the repayment problem. Lenders take advantage of their long-term situation by increasing their rates. Consequently, borrowers are incited to take more risk. Improving information disclosure ameliorates the repayment but does not incite lenders to offer more credits. Social bankers exhibit a higher probability of granting a loan and make fairer credit offers to borrowers than the other subject pools do.