When Opposites Attract: Is the Assortative Matching Always Positive?

Francesco Reito

MPRA Paper from University Library of Munich, Germany

Abstract: This paper shows that the positive assortative matching of Ghatak (1999) and Van Tassel (1999) is not a general result and always depends on the distribution of safe and risky types. Some new implications are: (i) borrowers may be better off by forming mixed groups. (ii) a mixed pooling equilibrium is possible when homogeneous pooling equilibria do not exist, and even when the reservation income of borrowers is equal to zero.

Keywords: joint liability lending; assortative matching; screening (search for similar items in EconPapers)
JEL-codes: D81 G20 O12 (search for similar items in EconPapers)
Date: 2011-02-17
New Economics Papers: this item is included in nep-cta and nep-mfd
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https://mpra.ub.uni-muenchen.de/28881/1/MPRA_paper_28881.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/76129/1/MPRA_paper_76129.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:28881

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