The Study of the Strategic Consequences of a Scoring Model Disclosure

Abstract

In this paper, the disclosure of information about the scoring model is investigated. Some of the company’s customers find out their internal rating in the company. Such customers can change their behavior to increase their internal rating. The customers who are aware of the leakage are represented as players who can choose a strategy: whether to increase their internal rating and, if so, how much. The main goal is to find the Bayesian–Nash equilibrium in this game and find out how it depends on various parameters, such as the scale of the leakage, the distribution of ratings.