superior. The intuition is simple: if underlying technologies are not convex, then risk-sharing can lower expected utility. The … likelihood of a bankruptcy cascade, "contagion," and systemic risk …

superior. The intuition is simple: if underlying technologies are not convex, then risk-sharing can lower expected utility. The … likelihood of a bankruptcy cascade, "contagion," and systemic risk …

theory to explain the structure of the financial system and show how it alters the risk taking incentives of financial …The concentration of risk within financial system is considered to be a source of systemic instability. We propose a … interconnected. This structure enables institutions to share the risk of systemic crisis in a privately optimal way, but channels …