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The Role of Group Size and Correlated Project Outcomes in Group Lending

Markheim, Marina (2017) The Role of Group Size and Correlated Project Outcomes in Group Lending. Theoretical Economics Letters 07 (05), pp. 1189-1200.

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Date of publication of this fulltext: 22 Jan 2018 17:49

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Other URL: http://doi.org/10.4236/tel.2017.75080, https://www.scirp.org/journal/PaperInformation.aspx?PaperID=77803


Abstract

This paper analyzes contract efficiency with regard to correlated project realization and the size of the borrowers in group lending. Firstly, I show that under the standard assumption of independent project payoffs, the expected group cost of default decreases with group size. Secondly, I show that small groups can also optimize group efficiency if individual payoffs and credit risks are ...

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Item type:Article
Date:21 July 2017
Institutions:Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Theoretische Volkswirtschaft (Prof. Dr. Lutz Arnold)
Projects:Open Access Publizieren (DFG)
Identification Number:
ValueType
10.4236/tel.2017.75080DOI
Keywords:Microfinance, Group Lending, Strategic Default, Group Size, Correlated Credit Risk
Dewey Decimal Classification:300 Social sciences > 330 Economics
Status:Published
Refereed:Yes, this version has been refereed
Created at the University of Regensburg:Yes
Item ID:36554
Owner only: item control page

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