Harsh default penalties lead to Ponzi schemes

B-Tier
Journal: Games and Economic Behavior
Year: 2009
Volume: 65
Issue: 1
Pages: 270-286

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In the presence of utility penalties, collateral requirements do not always eliminate the occurrence of Ponzi schemes. Harsh utility penalties may induce effective payments over collateral recollection values. In this event, loans can be larger than collateral costs and Ponzi schemes become possible.

Technical Details

RePEc Handle
repec:eee:gamebe:v:65:y:2009:i:1:p:270-286
Journal Field
Theory
Author Count
2
Added to Database
2026-01-28