students who have private information on their ability to learn and can decide to default on debt. We show that the combination … of ex-post moral hazard and adverse selection produces credit market rationing when default penalties are low. When … default penalties increase, the level of student risk aversion proves crucial in determining the market outcome. If risk …

students who have private information on their ability to learn and can decide to default on debt. We show that the combination … of ex-post moral hazard and adverse selection produces credit market rationing when default penalties are low. When … default penalties increase, the level of student risk aversion proves crucial in determining the market outcome. If risk …

to materialize ex post when the ex ante probability of counterparty default is low. Variation margins emerge as an …