Project Details
Description
Auto dealers collect loan quotes from many lending institutions, which might lower a customer's cost of financing. However, dealers' intermediation role forces car buyers to keep track of relevant car and loan attributes, including the car price, the loan interest rate, any finance charges, the down payment, the repayment period, the trade-in value of their old car, and the price and value of optional add-ons. Online buyer guides and anecdotal evidence suggest that auto dealers may utilize this complexity to obscure the actual price. Economists Tobias Salz and Andreas Grunewald will examine the effects of obfuscation and loan intermediation in the auto market. They will study and quantify the tradeoff between loan intermediation and the adverse effects of product complexity on consumer decision making that arises if durable good sellers also function as loan intermediaries.
| Status | Active |
|---|---|
| Effective start/end date | 4/1/18 → … |
Funding
- Russell Sage Foundation: US$34,400.00
ASJC Scopus Subject Areas
- Finance
- Safety Research
- Energy Engineering and Power Technology
- Decision Sciences(all)
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