Document Type
Article
Publication Date
8-2015
Publication Title
American Economic Journal - Microeconomics
Department
Department of Economics
Abstract
Empirical evidence on peer intermediation lags behind both theory and practice in which lenders use peers to mitigate adverse selection and moral hazard. Using a referral incentive under individual liability, we develop a two-stage field experiment that permits separate identification of peer screening and enforcement. Our key contribution is to allow for borrower heterogeneity in both ex ante repayment type and ex post susceptibility to social pressure. Our method allows identification of selection on repayment likelihood, selection on susceptibility to social pressure, and loan enforcement. Implementing our method in South Africa we find no evidence of screening but large enforcement effects. (JEL D14, D82, G21, O12, O16)
DOI
10.1257/mic.20130234
Dartmouth Digital Commons Citation
Bryan, Gharad; Karlan, Dean; and Zinman, Jonathan, "Referrals: Peer Screening and Enforcement in a Consumer Credit Field Experiment" (2015). Dartmouth Scholarship. 2371.
https://digitalcommons.dartmouth.edu/facoa/2371