Essays on informal banking
Name
123030513-MIT.pdf
Description
Full printable version
Size
4.28 MB
Format
Adobe PDF
Checksum (MD5)
a54962f33d732e7e73eec9210e58aa37
Author(s)
Basu, Karna
Advisor(s)
Abhijit Banerjee and Xavier Gabaix.
Date Issued
2006
Publisher
Massachusetts Institute of Technology
Abstract
This thesis is a collection of three theoretical essays that examine the role of time-inconsistent preferences in informal banking. The first two chapters focus on specific banking institutions, while the third studies individual welfare more generally. In Chapter 1, I develop a model of rotating savings and credit associations (roscas) where members are quasi-hyperbolic discounters. I show that, in this setting, roscas function as commitment savings devices, and can survive in equilibrium even in the absence of formal contracting or informal social sanctions. In Chapter 2, I study the behavior of quasi-hyperbolic discounters who have access to credit and a non-secure savings technology. I show that these agents might simultaneously save and borrow to create optimal investment incentives for future selves. Chapter 3 evaluates and compares the welfare outcomes for time-inconsistent agents under several banking environments.
Description
Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2006.
"September 2006."
Includes bibliographical references.
Subjects
Economics.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
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