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I would expect the opposite to be true; if you are known to offer good rates but with onerous consequences, then your counterparties should self-select to be th
by huac 6y ago
I would expect the opposite to be true; if you are known to offer good rates but with onerous consequences, then your counterparties should self-select to be those who are likely to repay. Lower rates are simply your CAC.
- BoorishBears 6y agoExcept right in the article we see that people realize the system is easily gamed such that the consequences are trivial, causing the opposite effect. Not to mention the proof in the pudding of their credit losses...