associated bankruptcy costs. When financial soundness is not perfectly observable, we show that incentive compatibility implies …

In this paper we present a model of oligopoly and financial constraints. We study allocations which are bankruptcy …-free (BF) in the sense that no firm can drive another firm to bankruptcy without becoming bankrupt. We show how such …

Under the assumption that asset markets are incomplete, this paper introduces bankruptcy in an intertemporal … argues that intervention in the form of a level of bankruptcy exemption can enhance not only social welfare but also … distributive equity. The bankruptcy law is carefully specified in the model. The model generates distributional changes in …

general equilibrium model. Binding ceilings on loan rates reduce the probability of bankruptcy. Lower bankruptcy rates result … in lower bankruptcy and liquidation costs. The authors state conditions under which the resources freed by this cost …