The ambiguous phrasing of pari passu (equal treatment) clauses in sovereign debt contracts has long baffled commentators. We show that in the presence of asymmetric information on a sovereign borrower's ability to pay, an uncertain clause gives rise to a collective action problem among creditors...

I study group lending with joint-liability contracts offered by Microfinance Institutions (MFIs). I develop a model of group lending where heterogeneous agents form groups, obtain capital from the MFI, and share risks among themselves. This paper shows that the composition of the groups is not...

Threshold common pool resource dilemmas, such as fisheries or groundwater reserves, are important topic for policy-makers. Uncertainty about the threshold for sustainable use or number of resource users may exacerbate the overconsumption problem. We are first to investigate the joint impact of...

The objective of this paper is to understand and test empirically the relationship between group size and informal risk sharing. Models of informal risk sharing with limited commitment and grim-trigger punishments upon deviation imply that larger groups provide better informal insurance....