explore this possibility, I develop a theory that unifies models of investment choice, informal risk sharing, and formal … financial contracts. I then test the predictions of this theory using a series of experiments with clients of a large … inefficiencies. First, borrowers free-ride on their partners, making risky investments without compensating partners for this risk …

The objective of this paper is to propose a model to assess risk for banks. Its main innovation is to incorporate … endogenous interaction between banks, recognising that the actual risk to which an individual bank is exposed also depends on its … data and therefore can be implemented as a risk assessment tool for financial regulators and central banks. We address the …