Vollmer, Uwe; Diemer, Michael - In: Review of Economics 62 (2011) 2, pp. 139-159
Summary Based on the model of Cordella and Yeyati (2003) this paper compares the effect of several bailout strategies of a „lender of last resort“ (LoLR) on a bank’s risk behaviour. We show that both „constructed ambiguity“, defined as a properly mixed strategy, and a pure strategy...