Multiple lending and constrained efficiency in the credit market

Andrea Attar, Eloisa Campioni and Gwenael Piaser ()

No 2005031, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this paper we present a model of credit market with several homogeneous lenders competing to finance an investment project. Contracts are non-exclusive, hence the borrower can accept whatever subset of the offered loans. We use the model to discuss efficiency issues in competitive economies with asymmetric information and non-exclusive agreements. We characterize the equilibria of this common agency game with moral hazard and show that they all belong to the constrained Pareto frontier.

Keywords: common agency; moral hazard; pareto efficiency; second best (search for similar items in EconPapers)
JEL-codes: D43 D61 L13 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Multiple Lending and Constrained Efficiency in the Credit Market (2006)
Working Paper: Multiple Lending and Constrained Efficiency in the Credit Market (2006)
Working Paper: Multiple Lending and Constrained Efficiency in the Credit Market (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2005031

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