Geromichalos, Athanasios; Lee, Jiwon; Lee, Seungduck; … - Economics Department, University of California-Davis - 2014
agents carry out mutually beneficial transactions by serving as collateral. A unique feature of our model is that the agent … who provides the loan might have a low valu- ation for the collateral asset. Nevertheless, the lender rationally chooses … to accept the collateral because she can access a secondary asset market where she can sell the asset. Following a recent …
