FrançaisEnglish

Érudit | Dépôt de documents >
CIRPÉE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi >
Cahiers de recherche du CIRPÉE >

Please use this identifier to cite or link to this item:

https://depot.erudit.org//id/003835dd

Title: Debt Rescheduling with Multiple Lenders: Relying on the Information of Others
Authors: Fluet, Claude
Garella, Paolo G.
Keywords: Overlending
Debt contracts
Insolvency
Illiquidity
Liquidation
Relationship lendign
Multiple lenders
Bayesian games
Issue Date: 2013-09
Series/Report no.: Cahiers du CIRPÉE;13-32
Abstract: Can debt rescheduling decisions differ in multiple lenders’ versus a single lender loan? Do multiple lenders efficiently react to information? We show that the precision of information plays an essential role. Foreclosing by one lender is disruptive so that a lender can rationally wait for the decision of other lenders, rescheduling her loan, if she expects that other lenders receive more precise information. We develop a Bayesian game where signals of different precision are randomly distributed to lenders. Both, premature liquidation and excessive rescheduling are possible in equilibrium, according to the pattern of information. However this is a second-best outcome, given that private information cannot be optimally shared.
URI: https://depot.erudit.org/id/003835dd
Appears in Collections:Cahiers de recherche du CIRPÉE

Files in This Item:

CIRPEE13-32.pdf, (Adobe PDF ; 376.04 kB)

Items in the Repository are protected by copyright, with all rights reserved, unless otherwise indicated.

 

About Érudit | Subscriptions | RSS | Terms of Use | Contact us |

Consortium Érudit ©  2016