Abstract
I briefly review a creditor coordination game as analyzed by Morris and Shin (2004). Acontinuum of creditors provide the external financing for a firm. Together they hold the bonds, which account for the complete liabilities of the firm. If the firm survives, the repayment on bonds is 1. In case of default there is no repayment and the investment is lost. Default occurs if the intrinsic value of the firm θ is below a default point D, which is endogenously determined
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© 2016 Springer Fachmedien Wiesbaden
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Ernstberger, P. (2016). Model. In: Crisis, Debt, and Default. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-13231-6_12
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DOI: https://doi.org/10.1007/978-3-658-13231-6_12
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Publisher Name: Springer Gabler, Wiesbaden
Print ISBN: 978-3-658-13230-9
Online ISBN: 978-3-658-13231-6
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