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Overoptimism and lender liability in the consumer credit market
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Libri Moderni

Iossa, Elisabetta - Palumbo, Giuliana

Overoptimism and lender liability in the consumer credit market / by Elisabetta Iossa and Giuliana Palumbo

Roma : Banca d'Italia, 2006

Temi di discussione del Servizio studi / Banca d'Italia

Abstract: Credit purchases of consumers goods are commonly made upon terms governed by an agreement between the lender and the seller. This type of purchase is generally subject to a legal principle of joint responsability under which the lender and the seller are jointly liable to the consumer for breach of the sale contract by the seller. Here its show tha joint responsability increases welfare and reduces the incentives of sellers to misrepresent the quality of their products.