We focus on adverse selection as a foundation of group lending. In a simple static model we show that there is no collateral effect if borrowers do not know each other. If the borrowers know each other, group lending implements efficient lending. However, it is not robust to collusive behavior, when transfers are allowed between colluding partners. Finally, we characterize the optimal collusion-proof group contract.
{"title":"Group Lending with Adverse Selection","authors":"J. Laffont, Tchétché N'Guessan","doi":"10.2139/ssrn.340581","DOIUrl":"https://doi.org/10.2139/ssrn.340581","url":null,"abstract":"We focus on adverse selection as a foundation of group lending. In a simple static model we show that there is no collateral effect if borrowers do not know each other. If the borrowers know each other, group lending implements efficient lending. However, it is not robust to collusive behavior, when transfers are allowed between colluding partners. Finally, we characterize the optimal collusion-proof group contract.","PeriodicalId":390004,"journal":{"name":"University of Southern California Center for Law & Social Science (CLASS) Law & Economics Research Paper Series","volume":"106 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2000-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114609759","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ever since Mancur Olson's 1965 classic The Logic of Collective Action was published, the dominant view of politics in the academy and the popular understanding has featured the special interest model. Small groups with high stakes in legislative outcomes solve their coordination and free-rider problems and then descend on Washington and other bastions of power, seeking rents. In this model, the special interests are the predators, the legislators the prey. In this paper, we argue that in an important set of cases, the process works in reverse. Legislators pro-actively solve the coordination and free riding problems identified by Olson so that they can then shake down the groups so formed for campaign contributions. We illustrate this model of a reverse Mancur Olson phenomenon with the extended example of estate tax repeal/non repeal, and suggest further extensions. The key properties of the phenomenon are small groups with high stakes that Congress has helped to frame or set up; plausible action; two or more sides; plausible longevity for any legislative action. The key predictions are that, once Congress has found rich territory for the game, it will string matters along, frequently voting, never really acting, and avoiding sensible compromises at every turn.
自1965年奥尔森(Mancur Olson)的经典著作《集体行动的逻辑》(The Logic of Collective Action)出版以来，在学术界和大众的理解中占主导地位的政治观点是以特殊利益模型为特征的。对立法结果有重大利害关系的小团体解决了他们的协调和搭便车问题，然后潜入华盛顿和其他权力堡垒，寻求租金。在这个模型中，特殊利益集团是捕食者，立法者是猎物。在本文中，我们认为，在一组重要的情况下，这个过程是相反的。议员们积极主动地解决奥尔森指出的协调和搭便车问题，这样他们就可以对为竞选捐款而组建的团体进行敲诈。我们用遗产税废除/不废除的扩展例子来说明这种反向Mancur - Olson现象模型，并建议进一步扩展。这种现象的关键特征是，国会帮助组建或建立了具有高风险的小团体;合理的行动;两面;两面;任何立法行动都有可能持续很长时间。关键的预测是，一旦国会为这场游戏找到了丰富的领域，它就会把事情串起来，频繁投票，从不真正行动，并且在每一个转折点上都避免明智的妥协。
{"title":"Shakedown at Gucci Gulch: A Tale of Death, Money & Taxes","authors":"Edward J. McCaffery, L. Cohen","doi":"10.2139/SSRN.581084","DOIUrl":"https://doi.org/10.2139/SSRN.581084","url":null,"abstract":"Ever since Mancur Olson's 1965 classic The Logic of Collective Action was published, the dominant view of politics in the academy and the popular understanding has featured the special interest model. Small groups with high stakes in legislative outcomes solve their coordination and free-rider problems and then descend on Washington and other bastions of power, seeking rents. In this model, the special interests are the predators, the legislators the prey. In this paper, we argue that in an important set of cases, the process works in reverse. Legislators pro-actively solve the coordination and free riding problems identified by Olson so that they can then shake down the groups so formed for campaign contributions. We illustrate this model of a reverse Mancur Olson phenomenon with the extended example of estate tax repeal/non repeal, and suggest further extensions. The key properties of the phenomenon are small groups with high stakes that Congress has helped to frame or set up; plausible action; two or more sides; plausible longevity for any legislative action. The key predictions are that, once Congress has found rich territory for the game, it will string matters along, frequently voting, never really acting, and avoiding sensible compromises at every turn.","PeriodicalId":390004,"journal":{"name":"University of Southern California Center for Law & Social Science (CLASS) Law & Economics Research Paper Series","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125099406","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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