This paper studies the welfare properties of competitive equilibria in an economy with incomplete markets subject to idiosyncratic and aggregate shocks. We focus on the role of securitization, whereby borrowers can reduce idiosyncratic asset risk, which enables increased leverage and investment....

How should we evaluate the welfare implications of improvements to safety technologies in the presence of offsetting behavior? We model this problem as a symmetric game in which each player's payoff depends on his own action and the average action of the other players, and analyze under which...

How should we evaluate the welfare implications of improvements to safety technologies in the presence of offsetting behavior? We model this problem as a symmetric game in which each player's payoff depends on his own action and the average action of the other players, and analyze under which...