I put forward a new theoretical framework to analyze the relationship between soft budget constraint syndrome and the economic performances of firms. It differs from the existing theoretical framework, à la Dewatripont and Maskin (1995), in the soft budget constraint literature. In this paper, soft budget constraint syndrome arises when firms that are expected to lose money are financed. The pa...

in this paper, the effect of financial liberalization on household’s budget liquidity constraint is analyzed with the use of an error correction model. financial liberalization will decline liquidity constraint, with expanding means of making future incomes available for present consumption. here a financial liberalization index for iran is defined using principal component analysis technique, ...

This paper finds an optimal mechanism for selling a good to a buyer who may be budget-constrained. We consider a seller with one unit of a good facing a buyer with a quasilinear utility function. If the buyer does not face a binding budget constraint, textbook monopoly pricing is optimal. By contrast, the possibility of a binding budget constraint can make it optimal for the seller to use nonli...

Fixed charge solid transportation problems are formulated as profit maximization problems under a budget constraint at each destination. Here item is purchased in different depots at different prices. Accordingly the item is transported to different destinations from different depots using different vehicles. Unitsare sold from different destinations to the customers at different selling prices...