Financial innovation in a general equilibrium model
Article Abstract:
A financial innovation model with general equilibrium is developed. The general equilibrium model allows intermediaries to use standard securities when issuing new financial securities against collateral. Intermediaries have to perform expensive marketing functions for their innovations. The equilibrium asset structure is shown to demonstrate commonly observed redundancies in financial markets. With financial innovation efficiency conditions given, the equilibrium allocation uncertainty was shown to have minimal utility results with minimal innovation costs.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1995
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Noise-proof equilibria in two-action signaling games
Article Abstract:
Two-action signaling games can create continuum noise-proof equilibria that are able to meet the never-a-weak-best-reply (NWBR) criterion. Such equilibria exist under real interval message space with satisfied standard monotonicity conditions. They are characterized by their ability to endure slight preturbation resulting from the receiver's effort to detect the game's signal.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1997
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