Feijen, Erik (contributor); Perotti, Enrico C. (contributor) - 2006
Lemma 1 In equilibrium, total demand for pies is (1 m)(a p
) and total supply is n
. Hence
p
(n
) = a n
1 m. The indirect … default, the condition for initial funding for entrepreneur j is
Dj p(m), (14)
where DP = 1 and DR = 1 !R.
Now we shift … �
supports a welfare-maximizing full entry, or + = 1+ p(m), which ensures funding and re�nancing
for all entrepreneurs. The …