Multi-lender coalitions in costly state verification models (Q934897)

The paper under review deals with equilibrium situations in financial intermediary structures modelled as multi-lender coalitions. The analyzed equilibrium is related to the trade-off between economies from the observed set, and a ``cost'' caused by the partial loss of control over the investments realized by the multi-lender coalition. One of the main contributions of the paper to the general investment models is the demonstration of the compatibility of financial intermediation and direct lending. The proof of existence of non-trivial equilibria, and their complete characterization belong to the significant results, as well.