On numerous occasions, rival firms seek to market goods together, particularly in high-technology industries. This paper empirically examines one such institution: the patent pool. The analysis highlights five findings consistent with the theoretical predictions: (a) pools involving substitute...

We explore the link between liquidity and investment in a an overlapping generation model with a standard asynchronicity between firms' access to and need for cash. Imperfect pledgeability hinders the capacity of capital markets to resolve this asynchronicity, resulting in credit rationing and a...

The significant growth in the volume of trade on the large value interbank payment systems and the concomitant massive increase in intraday overdrafts have raised serious concerns about the ability of existing payment systems to allow central banks to cope with wide scale disturbances and to...

We evaluate the competitive and governance effects of quot;duality.quot; Duality refers to the joint membership (e.g., by banks) in competing associations or joint ventures (e.g., Visa and MasterCard). We first show that the not-for-profit nature of the associations along with the usage-based...

Systemic risk refers to the propagation of a bank's economic distress to other economic agents linked to that bank through financial transactions. Banking authorities often prevent systemic risk through an implicit insurance of interbank claims, or by reducing interbank transactions and...

The recent crisis was characterized by massive illiquidity. This paper reviews what we know and don't know about illiquidity and all its friends: market freezes, fire sales, contagion, and ultimately insolvencies and bailouts. It first explains why liquidity cannot easily be apprehended through...