19_04_05_ECO
seminar on the importance of coordination in financial networks in the event of crisis
Professor Nizar Allouch Merlino of the University of Kent presents the paper "Default and coordination in financial networks".
Nizar Allouch, professor of Economics of the University of Kent, presented last April 4 at the University of Kent's School of Economics and Business Administration the paper: "Default and coordination in financial networks". During the session, in which several members of academic staff participated, Allouch explained the effects of how the decisions of an agent on whether or not to default affect the incentives of other agents to default.
The author explained that his paper seeks to show the existence of a Nash equilibrium of this default game. "We develop an algorithm to find all Nash equilibria that are based on the structure of the financial network and show that the introduction of a central clearing counterparty achieves the efficient equilibrium at no additional cost," the author explained.
This presentation is part of the cycle of seminars of research of School of Economics.