An analytically tractable model of a competitive, full-information economy is provided in which, for some parameter values, entry and exit over the course of the business cycle is concentrated among small firms. This model is intended to make the logical point that the relatively high...

The purpose of this paper is to address a question concerning risk management in continuing, multi-party, contractual, clearing and settlement arrangements through which large-value payments are typically made. We are particularly interested in the issues of incentive compatibility when a third...