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Long-term debt and hidden borrowing
Bar-Isaac, Heski; Cuñat, Alejandro - London School of Economics (LSE) - 2005
We consider borrowers with the opportunity to raise funds from a competitive banking sector that shares information, and from an alternative hidden lender. The presence of the hidden lender restricts the contracts that can be obtained from the banking sector. In equilibrium some borrowers obtain...
Persistent link: https://www.econbiz.de/10011071410
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Access to finance: a functional approach to supply and demand
Fischer, Gregory - London School of Economics (LSE) - 2011
examine in a direct way the challenges of designing policy to improve the way households can manage risk and savings and small …
Persistent link: https://www.econbiz.de/10011071530
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Credit card debt and default over the life-cycle
Lopes, Paula - London School of Economics (LSE) - 2003
default: (i) their access to credit markets is restricted; (ii) lenders of funds may seize their financial assets above an … are closely related to the shape of the life-cycle labor income profile, and henceforth vary across household education …
Persistent link: https://www.econbiz.de/10011071178
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Mortgages and monetary policy
Garriga, Carlos; Kydland, Finn E.; Šustek, Roman - London School of Economics (LSE) - 2013
Mortgage loans are a striking example of a persistent nominal rigidity. As a result, under incomplete markets, monetary policy affects decisions through the cost of new mortgage borrowing and the value of payments on outstanding debt. Observed debt levels and payment to income ratios suggest the...
Persistent link: https://www.econbiz.de/10011126379
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Recovery rates, default probabilities and the credit cycle
Bruche, Max; Gonzalez-Aguado, Carlos - London School of Economics (LSE) - 2006
ignoring the dynamic nature of credit risk could lead to a severe underestimation of credit risk (e.g. by a factor of up to 1 … a model in which this dependence is the result of an unobserved credit cycle: When times are bad, the default ….7 in terms of the 95% VaR). Also, the model indicates that the credit cycle is related to but distinct from the business …
Persistent link: https://www.econbiz.de/10010746498
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Costly bargaining and renegotiation
Anderlini, Luca; Felli, Leonardo - London School of Economics (LSE) - 1998
We identify the inefficiencies that arise when negotiation between two parties takes place in the presence of transaction costs. First, for some values of these costs it is efficient to reach an agreement but the unique equilibrium outcome is one in which agreement is never reached. Secondly,...
Persistent link: https://www.econbiz.de/10010928645
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Coordinating tasks in M-form and U-form organisations
Qian, Yingyi; Roland, Gerard; Xu, Cheng-Gang - London School of Economics (LSE) - 2003
We model the coordination of specialised tasks inside an organisation as "attribute matching". Using this method, we compare the performance of organisational forms (M-form and U-form) in implementing changes such as innovation and reform. In our framework, organisational forms affect the...
Persistent link: https://www.econbiz.de/10010928762
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Hierarchic contracting
Sanchez, Miguel A.; Hortala-Vallve, Rafael - London School of Economics (LSE) - 2005
We analyze the contracting structure in a moral hazard setting with several agents where output is produced jointly and is the only contractible variable. Since the salary of each agent is a function of all agents efforts, a positive externality arises between them. This externality is not...
Persistent link: https://www.econbiz.de/10010928768
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Transaction costs and the robustness of the Coase Theorem
Anderlini, Luca; Felli, Leonardo - London School of Economics (LSE) - 2000
This paper explores the extent to which the presence of ex-ante transaction costs may lead to failures of the Coase Theorem. In particular we identify and investigate the basic ‘hold-up problem’ which arises whenever the parties to a Coasian negotiation have to pay some ex-ante costs for the...
Persistent link: https://www.econbiz.de/10010745037
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Costly coasian contracts
Anderlini, Luca; Felli, Leonardo - London School of Economics (LSE) - 1998
We identify and investigate the basic ‘hold-up problem’ which arises whenever each party to a contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plausible circumstances, a ‘contractual solution’ to this hold-up problem is not...
Persistent link: https://www.econbiz.de/10010745370