NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Sovereign-Debt Renegotiations Revisted

Raquel Fernandez, Robert W. Rosenthal

NBER Working Paper No. 2981
Issued in May 1989
NBER Program(s):   ITI   IFM

The sovereign-debt literature has often implicitly assumed that all the power in the bargaining game between debtor and creditor lies with the latter. An earlier paper provided a game-theoretic basis for this contention. in that all the subgame-perfect equilibria of the game modeled have an extreme form in which the game's surplus is captured by the creditor. Two related games are analyzed here. Equilibria in which the debtor captures some of the surplus are shown to exist in one of them but not the other, and the roles of various assumptions in all three games is examined.

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Document Object Identifier (DOI): 10.3386/w2981

Published: "Strategic Models of Sovereign-Debt Negotiations" Review of Economic Studies, Vol. 57, pp. 331-349, (1990).

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