{"id":{"repo_id":"mit","oai_identifier":"oai:dspace.mit.edu:1721.1/108999"},"canonical_url":"https://search.dev.ndltd.org/etd/mit/oai:dspace.mit.edu:1721.1/108999","repository":{"repo_id":"mit","name":"MIT","base_url":"https://dspace.mit.edu/oai/request"},"display":{"title":"Private information and price regulation In the US credit card market","abstract":"Lenders typically learn new information about their borrowers over time but can be restricted from repricing debt in response to this information. I study a leading example of such re-pricing restrictions, the 2009 Credit CARD Act, to ask how such restrictions affect credit market efficiency. Using a near-universe of US consumer credit card account data as well as a large random sample of US consumer credit reports, I show evidence that the Act's restrictions had two competing effects: on the one hand, a decoupling between prices and default risk on existing loans over time, which engenders adverse selection through higher attrition of safe borrowers; on the other hand, lower markups on borrowers revealed to be inelastic, and hence lower price dispersion in the market overall. To quantify these two forces' net effect on market efficiency, I build a model of a competitive credit market with private information and changing borrower types over time, and I use the model to ask whether, and for whom, the Act's restrictions bring prices closer to an efficient benchmark of prices equaling marginal costs. While fully estimating the model remains a goal for future work, I here show preliminary results of how the model estimation is proceeding.","abstract_html":"Lenders typically learn new information about their borrowers over time but can be restricted from repricing debt in response to this information. I study a leading example of such re-pricing restrictions, the 2009 Credit CARD Act, to ask how such restrictions affect credit market efficiency. Using a near-universe of US consumer credit card account data as well as a large random sample of US consumer credit reports, I show evidence that the Act's restrictions had two competing effects: on the one hand, a decoupling between prices and default risk on existing loans over time, which engenders adverse selection through higher attrition of safe borrowers; on the other hand, lower markups on borrowers revealed to be inelastic, and hence lower price dispersion in the market overall. To quantify these two forces' net effect on market efficiency, I build a model of a competitive credit market with private information and changing borrower types over time, and I use the model to ask whether, and for whom, the Act's restrictions bring prices closer to an efficient benchmark of prices equaling marginal costs. While fully estimating the model remains a goal for future work, I here show preliminary results of how the model estimation is proceeding.","abstract_has_math":false,"creators":["Nelson, Scott Thomas"],"institution":"Massachusetts Institute of Technology","degree_name":null,"degree_level":null,"degree_discipline":null,"degree_department":"Massachusetts Institute of Technology. Department of Economics.","school":null,"contributors":[],"advisors":["James M. Poterba."],"committee_chairs":[],"committee_members":[],"year":2017,"date_issued":"2017","date_published":"2017","updated_at":"2026-07-22T22:21:59Z","subjects":["Economics."],"languages":["eng"],"rights":["MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission."],"rights_urls":["http://dspace.mit.edu/handle/1721.1/7582"],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/1721.1/108999","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.advisor","label":"Advisor","values":["James M. Poterba."]},{"key":"dc:contributor.department","label":"Department","values":["Massachusetts Institute of Technology. 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They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission."]},{"key":"dc:rights.uri","label":"Rights URI","values":["http://dspace.mit.edu/handle/1721.1/7582"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.uri","label":"Identifier URI","values":["http://hdl.handle.net/1721.1/108999"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Thesis: S.M., Massachusetts Institute of Technology, Department of Economics, 2017.","Cataloged from PDF version of thesis.","Includes bibliographical references (pages 33-36)."]},{"key":"dc:description.abstract","label":"Abstract","values":["Lenders typically learn new information about their borrowers over time but can be restricted from repricing debt in response to this information. I study a leading example of such re-pricing restrictions, the 2009 Credit CARD Act, to ask how such restrictions affect credit market efficiency. Using a near-universe of US consumer credit card account data as well as a large random sample of US consumer credit reports, I show evidence that the Act's restrictions had two competing effects: on the one hand, a decoupling between prices and default risk on existing loans over time, which engenders adverse selection through higher attrition of safe borrowers; on the other hand, lower markups on borrowers revealed to be inelastic, and hence lower price dispersion in the market overall. To quantify these two forces' net effect on market efficiency, I build a model of a competitive credit market with private information and changing borrower types over time, and I use the model to ask whether, and for whom, the Act's restrictions bring prices closer to an efficient benchmark of prices equaling marginal costs. While fully estimating the model remains a goal for future work, I here show preliminary results of how the model estimation is proceeding."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["S.M."]},{"key":"dc:title","label":"Title","values":["Private information and price regulation In the US credit card market"]}]}],"canonical_facts":{"dc:contributor.advisor":["James M. Poterba."],"dc:contributor.department":["Massachusetts Institute of Technology. Department of Economics."],"dc:contributor.other":["Massachusetts Institute of Technology. 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Using a near-universe of US consumer credit card account data as well as a large random sample of US consumer credit reports, I show evidence that the Act's restrictions had two competing effects: on the one hand, a decoupling between prices and default risk on existing loans over time, which engenders adverse selection through higher attrition of safe borrowers; on the other hand, lower markups on borrowers revealed to be inelastic, and hence lower price dispersion in the market overall. To quantify these two forces' net effect on market efficiency, I build a model of a competitive credit market with private information and changing borrower types over time, and I use the model to ask whether, and for whom, the Act's restrictions bring prices closer to an efficient benchmark of prices equaling marginal costs. While fully estimating the model remains a goal for future work, I here show preliminary results of how the model estimation is proceeding."],"dc:description.degree":["S.M."],"dc:identifier.uri":["http://hdl.handle.net/1721.1/108999"],"dc:language.iso":["eng"],"dc:publisher":["Massachusetts Institute of Technology"],"dc:rights":["MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission."],"dc:rights.uri":["http://dspace.mit.edu/handle/1721.1/7582"],"dc:subject":["Economics."],"dc:title":["Private information and price regulation In the US credit card market"],"dc:type":["Thesis"]},"updated_at":"2026-07-22T22:21:59Z"}