To Be Submitted Later

We construct an affine model that incorporates bond risk premia. By understanding risk premia, we are able to use a lot of information from well-measured risk-neutral dyanmics to characterize real expectations. We use the model to decompose the yield curve into expected interest rate and risk...

value greater than the Stackelberg payoff.

The main results are the following ones. First, the only consumption that can be part of an equilibrium is the one that optimizes the inter-temporal utility of the agent if he refuses the contract. Second, a necessary condition for an action to be implementable is that, at the optimal...

The rest of the paper is organized as follows. The next section relates our work to the existing literature. In the following section some characteristics of the Prospect Theory are displayed. Then the setting of the model is explained and the first order conditions derived. The calibration...

In conclusion, we show that the expected quality of an Agent conditional on a $d= (0,0) $ record is always above the expected quality of an untested agent. On the other hand, the expected quality associated with a record of $ (1,1) $ is below the expected quality of an untested agent for a large...

to securitize debt can actually decline, they respond with sharp downward adjustments in credit and consumption.