TY - JOUR
T1 - Dealer Pricing of Consumer Credit
AU - Hochguertel, S.
AU - Bertola, G.
AU - Koeniger, W.
PY - 2005
Y1 - 2005
N2 - Price discrimination incentives may induce dealers to bear the financial cost of their customers' credit purchases. We focus 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 installment-credit, personal-loan, and regional interest rate data offers considerable support to the assumptions and implications of our theoretical framework.
AB - Price discrimination incentives may induce dealers to bear the financial cost of their customers' credit purchases. We focus 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 installment-credit, personal-loan, and regional interest rate data offers considerable support to the assumptions and implications of our theoretical framework.
UR - https://www.scopus.com/pages/publications/33745246028
UR - https://www.scopus.com/inward/citedby.url?scp=33745246028&partnerID=8YFLogxK
U2 - 10.1111/j.1468-2354.2005.00362.x
DO - 10.1111/j.1468-2354.2005.00362.x
M3 - Article
SN - 0020-6598
VL - 46
SP - 1103
EP - 1142
JO - International Economic Review
JF - International Economic Review
ER -
