Article ID Journal Published Year Pages File Type
5072486 Games and Economic Behavior 2009 17 Pages PDF
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.
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Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Harsh default penalties lead to Ponzi schemes
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