Financial contracts are complicated and consumers often do not grasp them in their entirety. This may lead to financial mistakes. We develop a quantitative theory of unsecured credit and equilibrium default in a market with sophisticated and naïve borrowers who sometimes misunderstand their...

Traditionally, Sweden has not belonged to the Anglo-Saxon market-centred welfare model. However, Sweden is today among the European countries with the highest degree of public outsourcing and procurement of welfare services via competitive markets. The aim of this article is to investigate the...