Dealer Pricing of Consumer Credit
نویسندگان
چکیده
Price discrimination incentives may induce dealers to bear the financial cost of their customers’ credit purchases. We focus in particular on how financial market imperfections make it possible to segment the customer population. When borrowing and lending rates differ from each other and from the rate of interest on a durable good purchase, the structure of those rates influences customers’ choices to purchase on credit or cash terms, and the scope for dealers’ price discrimination. Empirical analysis of a set of installmentcredit, personal-loan, and regional interest rate data offers considerable support to the assumptions and implications of our theoretical framework.
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تاریخ انتشار 2001