Harsh default penalties lead to Ponzi schemes: a counterexample

DOI10.1016/J.GEB.2011.10.004zbMATH Open1279.91114OpenAlexW2083513712WikidataQ57935141 ScholiaQ57935141MaRDI QIDQ417701FDOQ417701

Authors: V. Filipe Martins-da-Rocha, Yiannis Vailakis 

Publication date: 14 May 2012

Published in: Games and Economic Behavior (Search for Journal in Brave)

Full work available at URL: http://hdl.handle.net/10036/4297

Recommendations

• On Ponzi schemes in infinite horizon collateralized economies with default penalties
• Harsh default penalties lead to Ponzi schemes
• Collateral Avoids Ponzi Schemes in Incomplete Markets
• Complete markets with bankruptcy risk and pecuniary default punishments
• Recourse loans and Ponzi schemes

zbMATH Keywords

collateraldefault penaltiesinfinite horizon economiesno-tradepessimistic expectationsPonzi schemes

Mathematics Subject Classification ID

Special types of economic equilibria (91B52) Trade models (91B60)

Cites Work

• Default and Punishment in General Equilibrium1
• Collateral Avoids Ponzi Schemes in Incomplete Markets
• Harsh default penalties lead to Ponzi schemes
• On Ponzi schemes in infinite horizon collateralized economies with default penalties

Cited In (8)

• Financial segmentation and collateralized debt in infinite-horizon economies
• On Ponzi schemes in infinite horizon collateralized economies with default penalties
• Harsh default penalties lead to Ponzi schemes
• Equilibrium with limited-recourse collateralized loans
• Endogenous debt constraints in collateralized economies with default penalties
• Equilibrium in collateralized asset markets: credit contractions and negative equity loans
• More punishment, less default?
• Recourse loans and Ponzi schemes

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