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NBER Working Papers · October 19, 2026 · On the brief until November 2, 2026

Credit Markets with New Screening Technologies -- by Maryam Farboodi, Péter Kondor, Pablo Kurlat

EconomicsFinance
THE AI ANGLE
Generating correlated screening errors across lenders

A study modeled credit market competition when lenders adopt screening tools with shared data and similar artificial intelligence systems. Correlated screening errors split lenders into distinct segments and produce a hockey-stick schedule of interest rates. The findings show that artificial intelligence innovation can either help or harm financially excluded borrowers.

Summary written by AI Business Lens with an AI model from the article at nber.org. It is not the article, and the publisher has not reviewed it. For publishers.

THE TEACHING ANGLE
Lenders using similar artificial intelligence models create correlated screening errors that divide credit markets and shift who receives loans.

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