1,721,462 research outputs found
On the use of collateral
No full textThis paper surveys existing explanations for the pervasive use of collateral in credit markets and relates them to the empirical evidence on the subject. Collateral may be used as a screening or an incentive device in markets characterized by various forms of asymmetric and biased information. The evidence is incompatible with the use of collateral as a signal of projects' quality, while broadly consistent with explanations based on its incentive properties and asymmetric evaluation of projects
Collateral, heterogeneity in risk attitude and the credit market equilibrium
No full textThis paper examines the argument that the availability of collateral rules out credit rationing. A model of the credit market with ex-ante asymmetric information and heterogeneous entrepreneur's attitudes toward risk is set up. It is shown that, due to the interplay between project choice and entrepreneurs' preferences, using collateral as a signal to screen safer projects may prove impossible. Instead, a partially separating two-contract equilibrium with rationing at one contract emerges. Contrary to previous theoretical research and consistently with conventional wisdom and systematic evidence, the use of collateral is never negatively correlated with project risk
Horizontal Runup and Seagrass Beach Cast-litters: Modelling and Observations
No full textPassarella, M.; Ruju, A.; De Muro, S., and Coco, G., 2020. Horizontal runup and seagrass beach cast-litters: Modelling and observations. In: Malvárez, G. and Navas, F. (eds.), Global Coastal Issues of 2020. Journal of Coastal Research, Special Issue No. 95, pp. 143-147. Coconut Creek (Florida), ISSN 0749-0208.
We collected measurements of wave-driven swash on a beach characterized by the presence and accumulation of seagrass beach-cast litter (the so-called banquette). Beach surveys showed that this deposit can drastically steepen the foreshore thus affecting wave dynamics. This work explores the relationship between vertical and horizontal swash time series, in a previously unreported case of seagrass wrack deposits under mild to moderate incoming waves. The results from the field measurements, obtained by video imagery time stack analysis, show that the seagrass deposits influence wave runup. The horizontal runup extent can be reduced when compared with a nearby seagrassfree profile under the same incoming waves. The horizontal runup in case of seagrass presence seems to be approximately one-third of the seagrass absence case. The ratio between observed vertical and horizontal swash, when seagrass deposits are present, is almost 3.5 times the seagrassfree case. The SWASH model was used to extend the analysis beyond our field observations. A number of possible wave forcing scenarios were run on both the seagrass-rich and the seagrass-free profiles. Differences between the cases of seagrass presence and absence show that the horizontal wave runup in case of seagrass deposition can be largely reduced. Using observations and modelling, we show that the seagrass deposits on the beach face and berm inhibit the horizontal runup and so affect one of the key components necessary to predict coastal inundation and to manage coastal areas especially considering ongoing changes in the mean sea level
Can price regulation increase cost-efficiency?
No full textThis paper examines the possibility that price regulation increases a monopolist's cost-efficiency. When the firm's choice of cost-reducing effort depends on the output supplied, a binding price-cap, by compelling the monopolist to produce more, results in lower costs. On the basis of a two-period asymmetric information model, the paper demonstrates that price regulation increases efficiency when the elasticity of demand is sufficiently low, even assuming very conservative preferences of the regulator and asymmetric information. Moreover, contrary to previous findings and conventional wisdom, we find that a periodical rate base review may increase productive efficiency through the positive effect on future cost-reducing effort, counterbalancing its well known adverse effect on the current level of effort. © 2004 University of Venice. Published by Elsevier Ltd. All rights reserved
In defense of usury laws
No full textUsury law is often criticized by economists for curtailing lending and thus creating deadweight costs. This paper shows that if moral hazard leads to credit rationing, a just-binding usury law creates a deadweight gain. This property also holds in most market-clearing equilibria. Independent of social insurance benefits, or curbing present-biased preferences, interest rate caps have merit. © 2009 The Ohio State University
Can Regulation Increase Firm's Efficiency?
No full textThis paper examines the possibility that price regulation increases a monopolist’s costefficiency.
When the firm’s choice of cost-reducing effort depends on the output supplied, a
binding price-cap, by compelling the monopolist to produce more, results in lower costs. On the
basis of a two-period asymmetric information model, the paper demonstrates that price regulation
increases efficiency when the elasticity of demand is sufficiently low, even assuming very
conservative preferences of the regulator and asymmetric information. Moreover, contrary to
previous findings and conventional wisdom, we find that a periodical rate base review may
increase productive efficiency through the positive effect on future cost-reducing effort,
counterbalancing its well known adverse effect on the current level of effort
Optimal price-cap reviews
No full textThis paper demonstrates, in a dynamic model of monopoly regulation with price-cap, that a periodic price review may increase productive efficiency. When the firm's choice of cost-reducing effort depends on the volume of output supplied, a periodic revision allows the regulator to set more binding prices, thus inducing the monopolist to exert more cost-reducing effort in the future. In a continuous-time setting we establish the conditions under which, within a given concession period, a single full rate base review improves cost-efficiency, and by this route, we also establish the optimal number of reviews. This number depends on the length of the concession period in relation to the slope of the demand function and the intensity of the disutility of effort. Our results add both a theoretical argument in favour of the practice of periodic reviews in price-cap regulation and provide regulators with a basis for the calculation of the optimal regulatory lag. Potentially, our argument is relevant to every regulated monopolist, including the utilities' networks. A particular case worth mentioning is the regulation of toll-road tariffs, particularly in the case of a newly privatized toll-road concessionaire. © 2008 Elsevier Ltd. All rights reserved
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