Designing win–win financial loan products for consumers and businesses

With the many possible designs that a financial company can offer to a consumer (e.g. terms, price, quality, features), a company can identify win–win products for both the consumer and the company. A key to identifying win–win products is to explicitly integrate the consumer's preferences for price and quality with the company's preferences for profit and market share. This paper builds a model that identifies the set of win–win products by integrating the preferences of buyer and seller. For any product not in this set, there is at least one product in the set that is better for both buyer and seller. The company's preferences are then used to select the optimal offer from the win–win set. Our development logically derives the results by focusing on financial products (e.g. loans, mortgages, credit cards) to consumers in the multitrillion dollar retail credit business.