TY  - JOUR
AB  - Describes market experiments conducted by a major credit card issuer. In a typical experiment, the issuer sends out hundreds of thousands of solicitations based on information received from credit reporting agencies (e.g., credit score, past delinquencies, etc.). Selection bias is striking: the average risk profile of those responding to higher interest rates is significantly worse than that of respondents to lower rates. Tracking respondents for 27 months after the experiment, respondents to higher rates displayed significantly higher delinquency and bankruptcy rates. Based on a research paper by Larry Ausubel.
VL  - 
IS  - 
SN  - 2474-6568
DO  - 10.1108/case.kellogg.2016.000083
UR  - https://doi.org/10.1108/case.kellogg.2016.000083
AU  - Al-Najjar Nabil
AU  - Besanko David
AU  - Uchoa Roberto
PY  - 2017
Y1  - 2017/01/01
TI  - Credit Solicitations as Market Experiments in the U.S. Credit Card Industry
T2  - Kellogg School of Management Cases
PB  - Kellogg School of Management
SP  - 1
EP  - 5
Y2  - 2024/09/23
ER  -