Araújo, Aloísio; Kubler, Felix; Schommer, Susan - In: Journal of Economic Theory 147 (2012) 2, pp. 450-476
In this paper we examine the effects of default and collateral on risk sharing. We assume that there is a large set of assets which all promise a risk less payoff but which distinguish themselves by their collateral requirements. In equilibrium agents default, the assets have different payoffs,...
