Kovrijnykh, Natalia; Livshits, Igor - Collegio Carlo Alberto, Università degli Studi di Torino - 2013
We propose a parsimonious model with adverse selection where delinquency, renegotiation, and bankruptcy all occur in …, and thus become delinquent. The lender renegotiates with some delinquent borrowers. In the absence of renegotiation …
