A Simple Model of Credit Rationing with Information Externalities

Credit-rationing model similar to Stiglitz and Weiss [1981] is combined with the information externality model of Lang and Nakamura [1993] to examine the properties of mortgage markets characterized by both adverse selection and information externalities. In a credit-rationing model, additional information increases lenders ability to distinguish risks, which leads to increased supply of credit. According to Lang and Nakamura, larger supply of credit leads to additional market activities and therefore, greater information. The combination of these two propositions leads to a general equilibrium model. This paper describes properties of this general equilibrium model. The paper provides another sufficient condition in which credit rationing falls with information. In that, external information improves the accuracy of equity-risk assessments of properties, which reduces credit rationing. Contrary to intuition, this increased accuracy raises the mortgage interest rate. This allows clarifying the trade offs associated with reduced credit rationing and the quality of applicant pool.

Environmental and Endogenous Factors Influencing Emigration in Juvenile Anadromous Alewives

We analyzed juvenile anadromous alewife migration at Bride Lake, a coastal lake in Connecticut, during summer 2006 and found that migration on 24-hour and seasonal timescales was influenced by conditions of the environment and characteristics of the individual. To identify environmental cues of juvenile migration, we continuously video recorded fish at the lake outflow and employed information-theoretic model selection to identify the best predictors of daily migration rate. More than 80% of the approximately 320,000 juveniles that migrated from mid-June to mid-August departed in three pulses lasting one or two days. Pulses of migration were associated with precipitation events, transient decreases in water temperature and transient increases in stream discharge. Diel timing of migration shifted over the summer. Early in the season most migration occurred around dawn; late in the season migration occurred at night. To identify individual characteristics associated with migratory behavior, we compared migrating juveniles that we collected as they were exiting Bride Lake to non-migrating juveniles that we collected from the center of the lake. Migrants were a non-random subset of the population; they were on average 1 – 12 mm larger, 2 – 14 d older, had grown more rapidly (11% greater length-at-age), and were in better condition (14% greater mass-at-length) than non-migrant fish. We infer that the amount of accumulated energy has a positive effect on the net benefit of migration at any time in the migratory season.