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Incomplete Financial Participation: Exclusive Markets, Investment Clubs, and Credit Risk

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  • Víctor Pérez Fernández
  • Juan Pablo Torres-Martínez

Abstract

We develop an abstract framework to analyze equilibrium existence in dynamic economic models with incomplete financial participation and price dependent financial constraints. Since we do not impose financial survival assumptions, our abstract model is a tool to analyze general equilibrium existence in security markets with exclusive credit lines and investment clubs. We also extend the literature of incomplete financial participation to include debts backed by price dependent collateral, and non-ordered preferences negatively affected by the amount of default.

Suggested Citation

  • Víctor Pérez Fernández & Juan Pablo Torres-Martínez, 2012. "Incomplete Financial Participation: Exclusive Markets, Investment Clubs, and Credit Risk," Working Papers wp363, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp363
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets

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