The extent of lender recourse following contractual default varies greatly across economies. Intuitively, one would … expect these differences to matter for default behavior at the micro-economic level and for equilibrium quantities. The … CitationID="CR11">2005</CitationRef>) where the implications of recourse for default patterns can be characterized. Under …

I model an incomplete markets economy where unaware agents do not perceive all states of nature, so unintended default … can occur when asset returns differ from what was perceived. The presence of default plays a crucial role in the proof of … existence—particularly in economies where beliefs are biased—by removing perceived arbitrage opportunities with respect to …

Introducing default and limited collateral into general equilibrium theory (GE) allows for a theory of endogenous … asset may default, its drop in price may be much greater than its objective drop in value because the drop in value reduces … information also shortens the horizon over which the asset might default, its price falls still further because the margin …

Tsomocos D.P. highlights the potential of the framework of strategic partial default of banks with credit chain on the …