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We develop a two-stage game in which competing airlines first choose the networks of markets to serve in the first stage before competing in price in the second stage. Spillovers in entry decisions across markets are allowed, which accrue on the demand, marginal cost, and fixed cost sides. We...
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; bankruptcy ; failure ; survival ; exit …
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individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic … Bankruptcy policy. …
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This study introduces a real option model to investigate how fiscal policy affects a representative firm's investment decision and to measure its welfare effects. On the one hand, the effects of financial instability on the optimal investment timing and on the probability of default are studied....
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-trivial choice between alternative bankruptcy procedures. Given limited commitment and asymmetric information, financial contracts … monitoring is too costly, renegotiation leads to reorganization, which resembles actual bankruptcy practice. We calibrate the … model to match certain aspects of the data on bankruptcy and firm dynamics in the United States. Our counterfactual …
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