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Default and Punishment in General Equilibrium

Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2003

We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by … and commodities. By reinterpreting the variables, our model encompasses a broad range of adverse selection and signalling … their loan or the price they quote might affect default rates. The equilibrium refinement we propose, in order to rule out …

Persistent link: https://www.econbiz.de/10014128751

Default and Punishment in General Equilibrium

Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2004

We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by … and commodities. By reinterpreting the variables, our model encompasses a broad range of adverse selection and signalling … compute how the size of their loan or the price they quote might affect default rates. It also makes for a simple equilibrium …

Persistent link: https://www.econbiz.de/10014070241

Default and Punishment in General Equilibrium

Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2004

We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by … and commodities. By reinterpreting the variables, our model encompasses a broad range of adverse selection and signalling … compute how the size of their loan or the price they quote might affect default rates. It also makes for a simple equilibrium …

Persistent link: https://www.econbiz.de/10014074211

Competitive Pooling : Rothschild-Stiglitz Reconsidered

Dubey, Pradeep K.; Geanakoplos, John - 2003

We build a model of competitive pooling, which incorporates adverse selection and signalling into general equilibrium …

Persistent link: https://www.econbiz.de/10014121720

Signalling and Default : Rothschild-Stiglitz Reconsidered

Dubey, Pradeep K.; Geanakoplos, John - 2003

In our previous paper we built a general equilibrium model of default and punishment in which equilibrium always exists … sales constraints as equilibrium signals. By specializing the default penalties and imposing an exclusivity constraint on …

Persistent link: https://www.econbiz.de/10014128748

Transparency aversion and insurance market equilibria

Gemmo, Irina; Browne, Mark Joseph; Gründl, Helmut - 2017

Telemonitoring devices can be used to screen consumers' characteristics and mitigate information asymmetries that lead to adverse selection in insurance markets. However, some consumers value their privacy and dislike sharing private information with insurers. In the second-best efficient...

Persistent link: https://www.econbiz.de/10011724373

Adverse Selection in Insurance Markets : On-Demand Contracts As a Screening Device

Braun, Alexander - 2020

We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...

Persistent link: https://www.econbiz.de/10012822927

Venture capital, double-sided adverse selection, and double-sided moral hazard

Houben, Eike - 2002 - First Version: March 2002, this Version: December 2002

The paper offers a new explanation for the widely observed use of redeemable and convertible preferred stock in venture capital finance. Redeemable and convertible preferred stocks can be used to endogenously allocate cash flow and control rights as a function of the state of nature, the...

Persistent link: https://www.econbiz.de/10011281511

Mixed signals : investment distortions with adverse selection

Darst, R. Matthew; Refayet, Ehraz - 2019

We study how adverse selection distorts equilibrium investment allocations in a Walrasian credit market with two-sided heterogeneity. Representative investor and partial equilibrium economies are special cases where investment allocations are distorted above perfect information allocations. By...

Persistent link: https://www.econbiz.de/10012181247

Competition and the Signaling Role of Prices

Adriani, Fabrizio - 2006

In a market where sellers are endowed with heterogeneous qualities of the same good and are more informed than buyers, high quality sellers' chances to trade might depend on their ability to inform buyers about the quality of the goods they offer. We study under what conditions and to what...

Persistent link: https://www.econbiz.de/10012733476

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