In this paper we explore how a cartel which is able to cooperate to a limited degree on a futures market may be able to implement a cooperative production plan which would be self-enforcing. The basic result of the paper is that appropriately chosen initial allocations of long positions in the...

We study the numerical properties of a class of models recently introduced to calculate the values of corporate bonds and other corporate liabilities. Starting from a discrete-time extensive form game representing the consequences of financial distress, these "strategic contingent claims models"...

In this paper we study how the complexity of a bank’s business model is related to its returns. Our approach allows for the possibility that bank returns may be retained in part by mobile and powerful bankers and that the amount of rent extraction may vary across different lines of business....