Since Brown (1952), standard habit formation models of consumption have exclusively focused on non-durables and services expenditure, and have assumed that the depreciation of the habit stock is a linear, univariate process. This paper builds on Ermini (1997) to dispense with these two...

In this paper, borrowing agents require capital to finance competitive bids for a single productive asset rather than requiring capital for individual projects. Loan size is no longer effective as a signaling mechanism. Instead, high quality agents will either offer a sufficiently high level of...

We examine lending and bidding when bidders, whose valuation for the good and wealth are private information, must borrow to fund their bid in a first-price sealed-bid auction. Any separating equilibrium is unique and the winning bidder typw randomnizes their bids.