Sorting in Credit Rationing: An Elementary Survey

Carmen Camacho (1, 2) , Hye-Jin Cho (3)

1 PSE - Paris School of Economics
2 PJSE - Paris Jourdan Sciences Economiques
3 Institut d'Études Politiques [IEP] - Paris

This paper reviews the literature in sorting providing with some of the key analytic elements to understand its causes. Among others, sorting has been applied to mechanism design, games and growth theory, allowing for the analysis of strategic behaviors in principal-agent problems. In some applications, an optimal solution can be obtained by introducing a one-dimensional screening device. In practice, screening devices are interest rates, high performance incentives or non-convex technologies that can yield for instance non convex salaries as functions of human capital.

Mots clés: Single crossing property; Screening; Credit rationing; Performance incentives

Domaines: Economies et finances

Carmen Camacho, Hye-Jin Cho. Sorting in Credit Rationing: An Elementary Survey. 2020. ⟨halshs-03030433⟩