Multiple Lending and Constrained Efficiency in the Credit Market

In this paper we present a model of credit market with several homogeneous lenders competing to finance an investment project. Contracts are non-exclusive, hence the borrower can accept whatever subset of the offered loans. We use the model to discuss efficiency issues in competitive economies with asymmetric information and non-exclusive agreements. We characterize the equilibria of this common agency game with moral hazard and show that they all belong to the constrained Pareto frontier

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Year of publication:	2005-03-01
Authors:	Andrea, ATTAR ; Eloisa, CAMPIONI ; Gwenaël, PIASER
Institutions:	Institut de Recherche Économique et Sociale (IRES), École des Sciences Économiques de Louvain
Subject:	Common Agency \| Moral Hazard \| Parto Efficiency \| Second Best

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Extent:	application/pdf
Series:	Discussion Papers (ECON - Département des Sciences Economiques).
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Sciences Economiques Number 2005024 2 pages long
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; D61 - Allocative Efficiency; Cost-Benefit Analysis ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004984836