In this paper we view bargaining and cooperation as an interaction superimposed on a game in strategic form. A multistage bargaining procedure for N players, the "proposer commitment" procedure, is presented. It is inspired by Nash's two-player variable-threat model; a key feature is the...

The classical Bagehot conception of a Lender of Last Resort (LOLR) that lends to illiquid banks has been criticized on two grounds: On the one hand, the distinction between insolvency and illiquidity is not clear-cut; on the other, a fully collateralized repo market allows central banks to...