Constructing Stategies in the Indefinitely Repeated Prisoner's Dilemma Game

Guillaume Rocheteau, Randall Wright and Cathy Zhang

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: We develop a model where entrepreneurs can finance random investment opportunities using trade credit, bank-issued assets, or money. They search for funding in an over-the-counter market where the terms of the contract, including the interest rate, loan size, and down payment, are negotiated subject to pledgeability constraints. The theory has implications for the cross-sectional distribution of corporate loans and interest rates, pass through from nominal to real rates, and the transmission of monetary policy, described by either changes in the money growth rate or open market operations. We also consider the e ects of imposing di erent regulations on banks.

Keywords: corporate finance; monetary policy; money; credit; interest rates (search for similar items in EconPapers)
JEL-codes: D83 E32 E51 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2016-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://business.purdue.edu/research/working-papers-series/2016/1286.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1286

Access Statistics for this paper

More papers in Purdue University Economics Working Papers from Purdue University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Business PHD ().