In multi-period insurance contract, the premiums that the insured must pay increase whenever he files a claim. Hence in this case the buyer of insurance faces a problem which does not exist in one period contracts. Namely: he must decide for which damages he should file a claim and for which he...

The authors provide an explanation for loan commitments unrelated to borrower creditworthiness. In their model, banks can use loan commitments to reduce uncertainty regarding their own future funding needs. Given a cost advantage to banks that can acquire such information, there exists an...