This paper investigates a model of default in financial networks where the decision by one agent on whether or not to … default impacts the incentives of other agents to escape default. Agents' payoffs are determined by the clearing mechanism … default game. Furthermore, we develop an algorithm to find all Nash equilibria that relies on the financial network structure …

strategically distort contracts to influence renegotiation outcomes. In this sequential common agency game, the initial contract … impacts elements of the renegotiation process: outside options (a `leverage' effect), and the beliefs of the new government …

In this paper we examine the effects of default and collateral on risk sharing. We assume that there is a large set of … agents default, the assets have different payoffs, and there are as many linearly independent assets available for trade as …