Referrals: Peer screening and enforcement in a consumer credit field experiment

Gharad Bryan, Dean Karlan, Jonathan Zinman

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


Empirical evidence on peer intermediation lags behind both theory and practice in which lenders use peers to mitigate adverse selection and moral hazard. Using a referral incentive under individual liability, we develop a two-stage field experiment that permits separate identification of peer screening and enforcement. Our key contribution is to allow for borrower heterogeneity in both ex ante repayment type and ex post susceptibility to social pressure. Our method allows identification of selection on repayment likelihood, selection on susceptibility to social pressure, and loan enforcement. Implementing our method in South Africa we find no evidence of screening but large enforcement effects.

Original languageEnglish (US)
Pages (from-to)174-204
Number of pages31
JournalAmerican Economic Journal: Microeconomics
Issue number3
StatePublished - 2015

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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