This paper endogeneizes the utility penalties, initiated by Dubey, Geanakoplos and Shubik (2005), by introducing a benevolent central planner choosing the value of marginal default utility penalties for each consumer. We also prove equilibrium existence with endogenous default penalties for...

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...