Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36482
Authors: 
Bieta, Volker
Broll, Udo
Siebe, Wilfried
Year of Publication: 
2008
Series/Report no.: 
Dresden discussion paper series in economics 04/08
Abstract: 
In this paper we challenge basic results of signaling models. In our banking model each project of a borrower is described by a continuous density of outcomes. Different density functions are classified according to second stochastisch dominance. Combining these features we find that in a banking model collateral is no longer in a position to signal the degree of riskiness of the borrower to the lender. In most cases the equilibrium is a pooling equilibrium.
Subjects: 
Signaling
collateral
perfect Bayesian equilibrium
JEL: 
D8
G20
Document Type: 
Working Paper

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