Reito, Francesco (2011): When Opposites Attract: Is the Assortative Matching Always Positive?
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Abstract
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? |
| Language: | English |
| 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 |
| Item ID: | 28881 |
| Depositing User: | Francesco Reito |
| Date Deposited: | 22 Feb 2011 20:59 |
| Last Modified: | 27 Sep 2019 16:56 |
| References: | D81 G20 O12 |
| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/28881 |
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