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Bank Competition and Financial Stability : A General Equilibrium Exposition

De Nicolo, Gianni - 2013

mechanisms for bank risk-taking studied in a large partial equilibrium literature. We show that competitive equilibriums maximize … banks is higher than that of banks enjoying monopoly rents, and is robust to the introduction of social costs of bank … failures. In this model, there is no trade-off between bank competition and financial stability …

Persistent link: https://www.econbiz.de/10013086044

Ethnic Fractionalization, Governance and Loan Defaults in Africa

Andrianova, Svetlana - 2014

We present a theoretical model of moral hazard and adverse selection in an imperfectly competitive loans market that is suitable for application to Africa. The model allows for variation in both the level of contract enforcement (depending on the quality of governance) and the degree of market...

Persistent link: https://www.econbiz.de/10013044553

Adverse Selection and Moral Hazard with Multidimensional Types

Kwon, Suehyun - 2017

This paper studies a contracting problem where agents' cost of actions is private information. With two actions, this leads to a two-dimensional screening problem with moral hazard. There is a natural one-dimensional ordering of types when there is both adverse selection and moral hazard....

Persistent link: https://www.econbiz.de/10012947518

A Continuous Theory of Income Insurance

Lindbeck, Assar - 2010

In this paper we treat an individual's health as a continuous variable, in contrast to the traditional literature on income insurance, where it is regularly treated as a binary variable. This is not a minor technical matter; in fact, a continuous treatment of an individual's health sheds new...

Persistent link: https://www.econbiz.de/10013141884

How to Deal with Covert Child Labour, and Give Children an Effective Education, in a Poor Developing Country : An Optimal Taxation Problem with Moral Hazard

Cigno, Alessandro - 2010

Given that credit and insurance markets are imperfect, and given also that intra-household transfers, and much of the work a child does, are private information, the second-best policy uses a combination of need and merit based education awards, together with a mix of taxes on parental income,...

Persistent link: https://www.econbiz.de/10013142234

On the Desirability of Taxing Capital Income to Reduce Moral Hazard in Social Insurance

Jacobs, Bas - 2009

This paper analyzes optimal linear taxes on labor income and savings in a standard two-period life-cycle model with endogenous leisure demands in both periods and non-insurable income risks. Households are subject to skill shocks in both periods of the life-cycle. We allow for completely general...

Persistent link: https://www.econbiz.de/10013155825

Government Guarantees and Bank Risk Taking Incentives

Fischer, Markus - 2014

This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of …

Persistent link: https://www.econbiz.de/10013055384

Market Transparency, Adverse Selection, and Moral Hazard

Klein, Tobias J. - 2014

We study the effects of improvements in market transparency on eBay on seller exit and continuing sellers' behavior. An improvement in market transparency by reducing strategic bias in buyer ratings led to a significant increase in buyer valuation especially of sellers rated poorly prior to the...

Persistent link: https://www.econbiz.de/10013060478

Systematic Risk, Bank Moral Hazard, and Bailouts

Lucchetta, Marcella - 2018

We show that the impact of government bailouts (liquidity injections) on a representative bank's risk taking depends on … the level of systematic risk of its loans portfolio. In a model where bank's output follows a geometric Brownian motion … and the government guarantees bank's liabilities, we show first that more generous bailouts may or may not induce banks to …

Persistent link: https://www.econbiz.de/10012922858

Loans, Insurance and Failures in the Credit Market for Students

Del Rey, Elena - 2011

In the education literature, it is generally acknowledged that both credit and insurance for students are rationed. In order to provide a rationale for these observations, we present a model with perfectly competitive banks and risk averse students who have private information on their ability...

Persistent link: https://www.econbiz.de/10013127182