We propose a parsimonious model with adverse selection where delinquency, renegotiation, and bankruptcy all occur in … equilibrium as a result of a simple screening mechanism. A borrower has private information about her cost of bankruptcy, and a …, and thus become delinquent. The lender renegotiates with some delinquent borrowers. In the absence of renegotiation …

Default rates on instalment loans vary with type of the good purchased. Using an Italian dataset of instalment loans … default rates across the different types of goods is due to unobserved individual heterogeneity (selection effect) or due to … more likely to default on any loan, while those buying kitchen appliances, furniture and computers are more likely to repay …

. Finally, we find that those debtors who misreported income had a lower probability of default on their debt repayment plans …

In this paper, I consider the problem of designing an optimal screening contract for a principal facing an agent whose …, pooling always occurs with respect to ex ante types while in the case of commitment with renegotiation, the introduction of an … ex ante adverse selection problem is shown to have a non trivial effect on the possibility of interim renegotiation in …

We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causal effect of … leverage must weigh default-prevention against market distortions due to adverse selection …

specify default, renegotiation and reorganization policies. Renegotiation entails a redistribution of social surplus, while … monitoring is too costly, renegotiation leads to reorganization, which resembles actual bankruptcy practice. We calibrate the …-trivial choice between alternative bankruptcy procedures. Given limited commitment and asymmetric information, financial contracts …

optimal screening mechanism and characterize its distortions. We analyze the inefficiency of the monopolist's offers in terms …