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On the Properties of General Equilibrium with Default in Economies with Incomplete Markets

Rodríguez, Eduardo A. - In: Latin American Journal of Economics-formerly Cuadernos … 48 (2011) 1, pp. 39-64

In this paper we study the properties of general equilibrium with default in economies with incomplete markets. It is … default and promised returns. An analysis of equilibrium in the case of economies with two homogeneous types of agents is also … presented, from which it can be deduced that in equilibrium under partial default the personal valuations of default for the …

Persistent link: https://www.econbiz.de/10009024532

Regulating collateral-requirements when markets are incomplete

Araújo, Aloísio; Kubler, Felix; Schommer, Susan - In: Journal of Economic Theory 147 (2012) 2, pp. 450-476

In this paper we examine the effects of default and collateral on risk sharing. We assume that there is a large set of … agents default, the assets have different payoffs, and there are as many linearly independent assets available for trade as …

Persistent link: https://www.econbiz.de/10011042948

Equilibrium Analysis, Banking, Contagion and Financial Fragility

Tsomocos, Dimitrios - Finance Research Centre, Oxford University - 2003

This paper contains a General Equilibrium model of an economy with Incomplete Markets (GEI) with money and default. The … allows for positive default levels in equilibrium. It also characterises contagion and financial fragility as an equilibrium …

Persistent link: https://www.econbiz.de/10005509825

Equilibrium Analysis, Banking and Financial Instability

Tsomocos, Dimitrios P. - Finance Research Centre, Oxford University - 2003

This paper first extends the canonical General Equilibrium with Incomplete Markets (GEI) model with money and default … with Commercial Banks and Default (MECBD) exist and financial instability and default emerge as equilibrium phenomena. A …

Persistent link: https://www.econbiz.de/10005729991

Optimal delegated search with adverse selection and moral hazard

Ulbricht, Robert - 2014

The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two...

Persistent link: https://www.econbiz.de/10010358239

Dynamic managerial compensation : on the optimality of seniority-based schemes

Garrett, Daniel F.; Pavan, Alessandro - 2014

We study the optimal dynamics of incentives for a manager whose ability to generate cash .ows changes stochastically with time and is his private information. We show that, in general, the power of incentives (or "pay for performance") may either increase or decrease with tenure. However, risk...

Persistent link: https://www.econbiz.de/10010476876

When trust fades... : can optimal mechanisms for policy decisions always be designed?

Major, Iván - 2013

Governments must usually take policy decisions with an imperfect knowledge of the economic actors' type or the actors' effort level. These issues are addressed within the framework of classic adverse selection or moral hazard models. I discuss in this paper how would the government’s and the...

Persistent link: https://www.econbiz.de/10010211955

Asymmetric information and the securitization of SME loans

Albertazzi, Ugo; Bottero, Margherita; Gambacorta, Leonardo - 2021

-transfer and default probabilities to gauge the severity of informational asymmetries in the loan securitization market. First, the …

Persistent link: https://www.econbiz.de/10012487672

The management of talent for innovation : optimal contracting for selection and incentives

Foarta, Dana; Sugaya, Takuo - 2018

Optimally reallocating human capital to tasks is key for an organization to successfully navigate a transition. We study how to design employment contracts to allocate employees to different valuable projects within an organization given two simultaneous challenges: The employees have private...

Persistent link: https://www.econbiz.de/10011980048

The optimal contract under adverse selection in a moral-hazard model with a risk-averse agent

Maréchal, François; Thomas, Lionel - In: Games 9 (2018) 1/12, pp. 1-22

This paper studies the optimal contract offered by a risk-neutral principal to a risk-averse agent when the agent’s hidden ability and action both improve the probability of the project being successful. We show that if the agent is sufficiently prudent and able, the principal induces a higher...

Persistent link: https://www.econbiz.de/10011849217