In an incomplete market with two sided altruistic agents and default.We show equilibrium existence if members of a dynasty act in an individualistic way by maximizing their own intergenerational utility functions. We also illustrate that a dynasty may end doing Ponzi schemes if its members act...

In an incomplete market with two sided altruistic agents and default. We show equilibrium existence if members of a dynasty act in an individualistic way by maximizing their own intergenerational utility functions. We also illustrate that a dynasty may end doing Ponzi schemes if its members act...

We develop a general equilibrium model of wealth transfers in the presence of uncertain lifetimes and default. Without introducing exogenous debt constraints, agents are allowed to make collateral-backed promises at any state of their life span.

We develop a general equilibrium model of wealth transfers in the presence of uncertain lifetimes and default. Without introducing exogenous debt constraints, agents are allowed to make collateral-backed promises at any state of their life span.

Allowing for durable commodities, we prove equilibrium existence in an abstract incomplete market economy with endogenous restricted financial participation without requiring financial survival assumptions. We apply our results to general financial structures including nominal, real and...

P ascoa and Seghir (2009) noticed that when collateralized promises become subject to utility penalties on default, Ponzi schemes may occur. However, equilibrium exists in some interesting cases. Under low penalties, equilibrium exists if the collateral does not yield utility (for example, when...