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Full-Text Articles in Economics
Extreme Adverse Selection, Competitive Pricing, And Market Breakdown, George J. Mailath, Georg Nöldeke
Extreme Adverse Selection, Competitive Pricing, And Market Breakdown, George J. Mailath, Georg Nöldeke
Cowles Foundation Discussion Papers
Extreme adverse selection arises when private information has unbounded support, and market breakdown occurs when no trade is the only equilibrium outcome. We study extreme adverse selection via the limit behavior of a financial market as the support of private information converges to an unbounded support. A necessary and sufficient condition for market breakdown is obtained. If the condition fails, then there exists competitive market behavior that converges to positive levels of trade whenever it is first best to have trade. When the condition fails, no feasible (competitive or not) market behavior converges to positive levels of trade.
Essays On Group Lending: Evidence From Jordan, Moh'd Al-Azzam
Essays On Group Lending: Evidence From Jordan, Moh'd Al-Azzam
LSU Doctoral Dissertations
Group lending has received a great attention from economists and policymakers for its successful delivery of credit to poor borrowers and its role in alleviating poverty in the developing countries. The success of group lending in providing credit to poor borrowers has been attributed to its ability to mitigate the asymmetry of information and enforcement problems in credit markets. The ability of group lending institutions to overcome the asymmetry of information and enforcement problems has been theorized to be the driving force behind their outreach to the poor, their sustainability, and their repayment performance. While there is a host of …