Lending and Monitoring: Big Tech vs Banks

Bank Competition and Household Privacy in a Digital Payment Monopoly

“…In Markovich and Yehezkel (2023) privacy cost heterogeneity underlies the suboptimality of giving households ownership of their data because too many users then underprovide data, which comes at a public cost as it worsens the functioning of the platform for all users. Bouvard et al (2022) focus on monitoring efficiency differences between an ecommerce platform and banks in the competition for loans towards merchants that are active on the platform. In Gambacorta et al (2022) platforms have an enforcement advantage over banks, because defaulting firms can face exclusion from the platform.…”