Essay On Limited Observability

Essay About Origination Incentives And Soft Information
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Pay-For-Loan-Performance V. Piece-Rate Loans What Is Better? Origination incentives create a typical example of rewarding the loan officer along a single plane, quantity, rather than on quality. This gives the loaner no incentive to search for “good” loans; as a result, distortions and “rogue” behavior manifest. On the other hand, incentives based on profitability would.

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