Contracting Sequentially with Multiple Lenders: The Role of Menus

Andrea Attar, Catherine Casamatta, Arnold Chassagnon and Jean-Paul Décamps

Journal of Money, Credit and Banking, 2019, vol. 51, issue 4, 977-990

Abstract: We study a credit market in which multiple lenders sequentially offer financing to a single borrower under moral hazard. We show that restricting lenders to post single offers involves a loss of generality: none of the equilibrium outcomes arising in this scenario survives if lenders offer menus of contracts. This result challenges the approach followed in standard models of multiple lending. From a theoretical perspective, we offer new insights on equilibrium robustness in sequential common agency games.

Date: 2019
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https://doi.org/10.1111/jmcb.12552

Related works:
Working Paper: Contracting Sequentially with Multiple Lenders: The Role of Menus (2019)
Working Paper: Contracting Sequentially with Multiple Lenders: The Role of Menus (2019)
Working Paper: Contracting Sequentially with Multiple Lenders: the Role of Menus (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:51:y:2019:i:4:p:977-990

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