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on Microfinance |
| By: | Diego Estevez |
| Abstract: | We develop a mechanism for unsecured lending among pseudonymous users that does not rely on collateral, legal identity, or centralized underwriting. New borrowers enter only through sponsors who delegate part of their own credit capacity, so onboarding a new account reallocates existing borrowing power rather than minting new capacity. Default losses flow back along the sponsor path, while repayment creates earned credit that expands future borrowing capacity. We prove that delegation conserves aggregate credit capacity, that revocation and default remain local to a unique sponsor path, and that a simple cap on earned-credit growth makes repay-then-default weakly unprofitable. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.03307 |
| By: | Gabriele Iannotta (Politecnico di Milano); Katharina Hartinger (Johannes Gutenberg University, Germany); Tommaso Agasisti (Politecnico di Milano) |
| Abstract: | The advent of commission-free trading apps has drawn millions of young, financially inexperienced users into capital markets, raising concerns about their preparedness to navigate behavioral pitfalls embedded in platform design. We evaluate two short and scalable simulation-based financial education interventions in a three-arm randomized experiment with 704 undergraduate students at an Italian university (488 completers). In both treatments, participants trade fictitious assets in an incentivized 20-round game that simulates a trading-app environment, accompanied by introductory educational content on core investment concepts. The augmented treatment additionally embeds short in-game pop-ups addressing behavioral pitfalls relevant to app-based trading, including diversification, overtrading, the disposition effect, availability bias, and herd behavior. Measured two weeks after the intervention, both treatments significantly increase financial knowledge relative to a no-intervention control group, with effect sizes of approximately 0.25-0.30 SD for the baseline Simulation and about 0.5 SD for the pop-up-augmented version. Both treatments also improve portfolio efficiency captured by a design-based Sharpe ratio computed from declared allocations, while the augmented treatment additionally increases realized in-game portfolio efficiency and revealed risk-taking during the incentivized simulation. By contrast, stated risk attitudes remain unchanged, indicating that the intervention improves how financial knowledge is translated into portfolio decisions rather than altering underlying risk preferences. |
| Keywords: | Financial education, Financial literacy, Trading apps, Portfolio efficiency, Learning-by-doing, Behavioral nudges, Randomized controlled trial |
| JEL: | G53 G11 G41 C93 I21 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:jgu:wpaper:2603 |
| By: | Carlos Carvalho; Bruno Perdigão; Ricardo Schechtman |
| Abstract: | Conditional on a loan application filed by a small or medium enterprise (“SME”), we find that the existence of recent loans of that firm with private domestic banks increases the chance a loan will be granted by a foreign bank relative to a private domestic bank. On the other hand, recent loans extended by foreign banks or by domestic state-owned banks do not produce this differential effect. Furthermore, the forementioned effect vanishes for large firms. These findings are consistent with a mechanism by which foreign banks overcome borrower informational asymmetries by relying on their domestic peers’ recent behavior. Indeed, the higher ability of private domestic banks to access informationally opaque SMEs, dependent on soft information, makes recent loans with them a more valuable signal for foreign lenders who lack the same ability. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:647 |