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Inverse Adverse Selection: The Market for Gems
Dari-Mattiacci, Giuseppe; Onderstal, Sander; Parisi, … - Tinbergen Institute - 2011
This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof's setting, sellers are better informed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: The market...
Persistent link: https://www.econbiz.de/10008838639
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Continuous Time Trading in Markets with Adverse Selection
Janssen, Maarten C.W.; Karamychev, Vladimir - Tinbergen Institute - 2000
We investigate the nature of the adverse selection problem in a market for a durable good where trading and entry of new buyers and sellers takes place in continuous time. In the continuous time model equilibria with properties that are qualitatively different from the static equilibria, emerge....
Persistent link: https://www.econbiz.de/10005144503
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Credit Rationing Effects of Credit Value-at-Risk
Slijkerman, Jan Frederik; Smant, David J.C.; Vries, … - Tinbergen Institute - 2004
asymmetric information the banks face the risk of adverse selection. Credit Value-at-Risk (CVaR) regulation counters the problem … distorts the operation of credit markets. We show that a binding CVaR constraint introduces credit rationing and lowers social …
Persistent link: https://www.econbiz.de/10005136889
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Competition for a Prize
Noll, Rob van der - Tinbergen Institute - 2006
I present a model in which individuals compete for a prize by choosing to apply or not. Abilities are private information and in attempt to select the best candidate, the committee compares applicants with an imperfect technology. The choice of application cost, size of the prize and use of...
Persistent link: https://www.econbiz.de/10005136926
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Dynamic Insurance and Adverse Selection
Janssen, Maarten C.W.; Karamychev, Vladimir A. - Tinbergen Institute - 2001
We take a dynamic perspective on insurance markets under adverse selection and study a generalized Rothschild and Stiglitz model where agents may differ with respect to the accidental probability and their expenditure levels in case an accident occurs. We investigate the nature of dynamic...
Persistent link: https://www.econbiz.de/10005136996
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Cycles and Multiple Equilibria in the Market for Durable Lemons
Janssen, Maarten C.W.; Karamychev, Vladimir - Tinbergen Institute - 2000
We investigate the nature of market failure in a dynamic version of Akerlof (1970) where identical cohorts of a durable good enter the market over time. In the dynamic model, equilibria with qualitatively different properties emerge. Typically, in equilibria of the dynamic model, sellers with...
Persistent link: https://www.econbiz.de/10005137167
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Capital Structure and the Redeployability of Tangible Assets
Campello, Murillo; Giambona, Erasmo - Tinbergen Institute - 2011
buildings). Consistent with a credit supply-side view of capital structure, we find that asset redeployability is a particularly … important driver of leverage for firms that are likely to face credit frictions (small, unrated firms). Our tests also show that … asset redeployability facilitates borrowing the most during periods of tight credit. Our work contributes new evidence to …
Persistent link: https://www.econbiz.de/10009209849
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Disagreement and Flexibility: A Theory of Optimal Security Issuance and Capital Structure
Boot, Arnoud W.A.; Thakor, Anjan V. - Tinbergen Institute - 2003
In this paper we introduce flexibility as an economic concept and apply it to the firm’s security issuance decision and capital structure choice. Flexibility is the ability to make decisions that one thinks are best even when others disagree. The firm’s management values flexibility because...
Persistent link: https://www.econbiz.de/10005137258
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Markov-Perfect Nash Equilibria in Models with a Single Capital Stock
Dockner, Engelbert J.; Wagener, Florian O.O. - Tinbergen Institute - 2006
investment in a public capital stock, and the inter-temporal consumption of a reproductive asset. …
Persistent link: https://www.econbiz.de/10005144483
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Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries
Bartelsman, Eric J.; Haltiwanger, John; Scarpetta, Stefano - Tinbergen Institute - 2004
In this paper we provide an analysis of the process of creative destruction across 24 countries and 2-digit industries over the past decade. We rely on a newly assembled dataset that draws from different micro data sources (business registers, census, or representative enterprise surveys). The...
Persistent link: https://www.econbiz.de/10005136875