{
    "name": [
        {
            "role": "creator",
            "namePart": [
                "Salcedo, Bruno"
            ],
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            }
        },
        {
            "role": "creator",
            "namePart": [
                "Sultanum, Bruno"
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            "recordInfo": {
                "recordIdentifier": [
                    "7746"
                ]
            }
        },
        {
            "role": "creator",
            "namePart": [
                "Zhou, Ruilin"
            ],
            "recordInfo": {
                "recordIdentifier": [
                    "8431"
                ]
            }
        }
    ],
    "genre": [
        "article"
    ],
    "abstract": [
        "This paper studies the optimal design of a liability-sharing arrangement as an in\ufb01nitely repeated game. We construct a noncooperative model with two agents: one active and one passive. The active agent can take a costly and unobservable action to reduce the incidence of crisis, but a crisis is costly for both agents. When a crisis occurs, each agent decides unilaterally how much to contribute mitigating it. For the one-shot game, when the avoidance cost is too high relative to the expected loss of crisis for the active agent, the \ufb01rst-best is not achievable. That is, the active agent cannot be induced to put in effort to minimize the incidence of crisis in a static game. We show that with the same stage-game environment, the \ufb01rst-best cannot be implemented as a perfect public equilibrium (PPE) of the infinitely repeated game either. Instead, at any constrained efficient PPE, the active agent \"shirks\" in\ufb01nitely often, and when crisis happens, the active agent is \"bailed out\" in\ufb01nitely often. The frequencies of crisis and bailout are endogenously determined in equilibrium. The welfare optimal equilibrium being characterized by recurrent crises and bailouts is consistent with historical episodes of financial crises, which features varying frequency and varied external responses for troubled institutions and countries in the real world. We explore some comparative statics of the PPEs of the repeated game numerically."
    ],
    "language": [
        "eng"
    ],
    "titleInfo": [
        {
            "title": "A Crises-Bailouts Game",
            "titlePartNumber": "Working Paper 22-01"
        }
    ],
    "identifier": [
        {
            "$": "https:\/\/doi.org\/10.21144\/wp22-01",
            "@type": "doi"
        }
    ],
    "originInfo": {
        "issuance": "multipart",
        "sortDate": "2022-01-05",
        "dateIssued": "January 5, 2022"
    },
    "recordInfo": {
        "recordIdentifier": [
            "610556"
        ],
        "recordUpdatedDate": "2026-02-23 17:09:08",
        "recordCreationDate": "2022-01-11 23:08:18",
        "recordType": "item"
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    "classification": [
        {
            "$": "C73, D82",
            "@authority": "jel"
        }
    ],
    "typeOfResource": "text",
    "physicalDescription": {
        "form": "electronic",
        "extent": "48 pages",
        "digitalOrigin": "born digital",
        "internetMediaType": [
            "application\/pdf"
        ]
    },
    "location": {
        "url": [
            "https:\/\/fraser.stlouisfed.org\/title\/working-papers-federal-reserve-bank-richmond-3942\/a-crises-bailouts-game-610556"
        ],
        "iiif_manifest_url": [
            "https:\/\/iiif.slf.digirati.io\/presentation\/item\/610556"
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        ],
        "pdfUrl": [
            "https:\/\/fraser.stlouisfed.org\/docs\/historical\/frbrich\/wp\/frbrich_wp22-01.pdf"
        ],
        "textUrl": [
            "https:\/\/fraser.stlouisfed.org\/files\/text\/historical\/frbrich\/wp\/frbrich_wp22-01.txt"
        ]
    },
    "relatedItem": [
        {
            "@type": "parent",
            "recordInfo": {
                "recordIdentifier": [
                    "3942"
                ]
            },
            "titleInfo": [
                {
                    "title": "Working Papers (Federal Reserve Bank of Richmond)"
                }
            ],
            "name": [
                {
                    "role": "creator",
                    "namePart": [
                        "Federal Reserve Bank of Richmond"
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                            "521"
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                }
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    ],
    "accessCondition": "For more information on rights relating to this item, please see: https:\/\/fraser.stlouisfed.org\/title\/working-papers-federal-reserve-bank-richmond-3942\/a-crises-bailouts-game-610556"
}