Default and Punishment in General Equilibrium
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our model encompasses a broad range of adverse selection and signalling phenomena in a perfectly competitive, general equilibrium framework. Copyright The Econometric Society 2005.
Year of publication: |
2005
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Authors: | Dubey, Pradeep ; Geanakoplos, John ; Shubik, Martin |
Published in: |
Econometrica. - Econometric Society. - Vol. 73.2005, 1, p. 1-37
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Publisher: |
Econometric Society |
Saved in:
Online Resource
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