Sequential Banking.

Article OPEN
Bizer, David S; DeMarzo, Peter M;
  • Journal: Journal of Political Economy,volume 100,issue 1 February,pages41-61
  • Related identifiers: doi: 10.1086/261806

The authors study environments in which agents may borrow sequentially from more than one leader. Although debt is prioritized, additional lending imposes an externality on prior debt because, with moral hazard, the probability of repayment of prior loans decreases. Equ... View more
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