HERE WE PRESENT the likelihood function used to estimate the parameters of the demand model. The model can be thought of as a system of four “standard” equations: (i) a tobit down payment equation (with censoring at the minimum down), (ii) a probit purchase equation, (iii) a tobit repayment equation (with censoring at full payment or at the end of our sample), and (iv) a linear price negotiatio...

∑ Loans are transactions over time, with risk fi Need for insurance fi MH problems Risk: Borrower needs insurance (limited liability), as even loans for good projects cannot be repaid in bad years. But lender cannot provide insurance as he cannot monitor genuine failures from false claims ∫ Problem of enforcement. (Moral Hazard (MH) in repayment). Limited liability induces risk taking behavior ...

We analyze the role of debt in persuading an entrepreneur to pay out cash ows, rather than to divert them. In the Žrst part of the paper we study the optimal debt contract—speciŽcally, the trade-off between the size of the loan and the repayment—under the assumption that some debt contract is optimal. In the second part we consider a more general class of (nondebt) contracts, and derive suffic...

This study identifies the main areas and current dynamics of repayment behaviour with regards to microfinance suggests future research directions. We explored a selection 258 papers from Scopus database using bibliometric analysis find on in terms between 1996 early 2022. Based various citations publications, as well their location relevance within network, we identified most influential articl...