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[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Beliefs and Settlement Risk
[object Object],[object Object],[object Object],[object Object],Settlement Risk
Model components: Ring topology game ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2 3 4 deliveries, production,  payments, P ... ... 5 1 Predecessors deliver intermediate goods Consumption,  F*(amount delivered)  successors pay for good in period 2
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Settlement game
[object Object],[object Object],[object Object],Ring topology game
[object Object],[object Object],[object Object],[object Object],[object Object],Beliefs about Settlement Risk
Model components ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2 3 4 deliveries, F payments, P ... ... 5 1 predecessors 1 and 2 successors 3 and 4
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Decision making
[object Object],[object Object],Decision making (cont’d) assets by successor expected number of creditors by the successor
[object Object],[object Object],Forming beliefs , 0=default, 1=settle α  = weight parameter (we use 0.1)
Convergence – example rounds banks white = settle, orange = default no convergence banks rounds convergence “all settle“ equilibrium 0 0 100 100 0 ~300 ~300
[object Object],[object Object],[object Object],reach = 1 Money vs. network reach reach = 2 reach = 5
[object Object],[object Object],[object Object],Degree of heterogeneity mixed refers to a cycle or to a partial settle/default equilibrium
[object Object],[object Object],[object Object],Heterogeneity and reach reach = 2 reach = 5 reach = 1
Conclusions ,[object Object],[object Object],[object Object],[object Object]

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Beliefs and Settlement Risk

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  • 11. Convergence – example rounds banks white = settle, orange = default no convergence banks rounds convergence “all settle“ equilibrium 0 0 100 100 0 ~300 ~300
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