Credit-risk decision model and credit rationing with asymmetry information

We introduce theory and method of incentive mechanism to the research, and we establish credit-risk decision model with incentive effects. We consider that there are two types of borrowers in society: one is high-risk type and the other is low-risk type. Under the same rationing, we investigate proportions about the two types in borrowing group. In our model, the credit-risk decision policy the bank provides the same rationing will result in increase of the proportion of the high-risk applicants in borrowing group. Therefore, the bank must establish effective risky distinguishing mechanism so that they can avoid credit risk and ensure safe operation of credit money. In addition, we also give condition the bank provides the same rationing to the two types.