The Default-Prone U.S. Toxic Asset Auction Plan

Applying auction theory to the toxic-asset rescue plan currently released by theUnited States Treasury Department, this paper demonstrates an equilibrium wheremoderately poor bidders outbid rich bidders in such auctions. After defeating theirrich rivals and acquiring the toxic assets, such bidders will default on governmentprovidedloans whenever the toxic assets turn out to be unsalvageable. An alternativemechanism is discussed.[...]

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Year of publication:	2009-04-28
Authors:	Zheng, Charles Zhoucheng
Institutions:	Iowa State University of Science and Technology <Ames, Iowa> / Department of Economics
Subject:	Wertpapier \| Schuldnerverzug \| Bezugsquelle \| source \| Rettung \| bail-out

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Extent:	154624 bytes 10 p. application/pdf
Series:	IOWA State University - Department of Economics - Working Papers Working Paper # 09005
Type of publication:	Book / Working Paper
Language:	English
Classification:	Specific management methods ; Financial theory ; Management of financial services: stock exchange and bank management science (including saving banks) ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10009360770