Debt contracts and collapse as competition phenomena
نویسندگان
چکیده
We study financial intermediation in which sufficient sorting is impossible. We identify a new type of market failure that may occur even when returns of investing entrepreneurs are verifiable. Moreover, we suggest that the nature of competition determines the contracts banks offer. A monopoly bank will offer equity contracts. In any pure strategy equilibrium when lenders compete à la Bertrand, however, only debt contracts are offered. © 2006 Elsevier Inc. All rights reserved. JEL classification: G24; G28; G32; G38; D80; D92; D43
منابع مشابه
Conclusion of the collateral contracts based on the cause of debt
Collateral contracts which are concluded to guarantee and facilitate the collection of debts, as subordinate contracts, are always based on a basic relationship and debt. The Conclusion of the collateral contracts, including transition and guaranteed collateral contract, about a debt that has been fully formed and proven to be on the debtor's obligation, undoubtedly is correct and valid. About ...
متن کاملInvestigating position of Debt purchase in Iranian banking system
Debt purchase contracts a kind of contract in which the long term debt of debtors is bought with a price less than its real price by debtor or a third person. Although there are a wide variety of opinions about the legal status of this subject, it is accepted in most cases. Nowadays, considering the existence of a broad range of debts and the contracts based on them, and also employing the ment...
متن کاملThe Impact of EU’s Competition Laws on the Long-Term Gas Contracts
Competion laws follow varions goals including economic targets such as increase of economic efficiency and consumers' welfare. This branch of law has resisted against agreements and contracts which endanger the consumers' or public welfare and has tried to prevent such contracts and processes. European Union is among the greatest consumers and importer of energy in the world. The most part of t...
متن کاملOptimisation of Healthcare Contracts: Tensions Between Standardisation and Innovation; Comment on “Competition in Healthcare: Good, Bad or Ugly?”
An important determinant of health system performance is contracting. Providers often respond to financial incentives, despite the ethical underpinnings of medicine, and payers can craft contracts to influence performance. Yet contracting is highly imperfect in both single-payer and multi-payer health systems. Arguably, in a competitive, multi-payer environment, contractual innovation may occur...
متن کاملThe Role of Corporate Governance Mechanisms and the Auditor's Specialty in Debt Contract Strictness
Objective: Violation of contractual conditions leads to the transmission of bad news due to poor performance and the expertise of auditors and regulatory mechanisms can be a factor in adjusting it. In this article, the purpose is to examine the role of strictness in the debt contract and the auditor's expertise. Research Method: In order to study the subject based on the logistic regression mo...
متن کامل