Reito, Francesco (2011): When Opposites Attract: Is the Assortative Matching Always Positive?
Download (197kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||When Opposites Attract: Is the Assortative Matching Always Positive?|
|Keywords:||joint liability lending; assortative matching; screening|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
G - Financial Economics > G2 - Financial Institutions and Services > G20 - General
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||Francesco Reito|
|Date Deposited:||22 Feb 2011 20:59|
|Last Modified:||23 Mar 2015 23:17|
Available Versions of this Item
- When Opposites Attract: Is the Assortative Matching Always Positive? (deposited 22 Feb 2011 20:59) [Currently Displayed]