Collateral Versus Default History

Marta Faias, Abdelkrim Seghir

Research output: Chapter in Book/Report/Conference proceedingOther chapter contribution

Abstract

This paper deals with equilibrium existence for incomplete markets economies with finitely-lived agents and infinitely-lived agents when default is allowed and borrowers have to constitute collateral in terms of durable goods. In the first model, lenders are protected by an exogenous personalized collateral. In the second model, the personalized collateral requirements are endogenously determined by a financial institution whose objective is to minimize the default rate taking into account agent’s default history.
Original languageEnglish
Title of host publicationDynamics, Games and Science
Subtitle of host publicationInternational Conference and Advanced School Planet Earth, DGS II, Portugal, August 28–September 6, 2013
Pages273-290
ISBN (Electronic)978-3-319-16118-1
DOIs
Publication statusPublished - 2015

Publication series

NameDynamics, Games and Science
Volume1
ISSN (Print)2364-950X
ISSN (Electronic)2364-9518

Keywords

  • Incomplete Market
  • Spot Market
  • Default Rate
  • Demographic Structure
  • Mortgage Market

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