Skip to Main Content

Working Papers

November 2011, No. 11-07

Contingent Capital: The Trigger Problem

Edward S. Prescott

Price triggers in contingent capital bonds are analyzed. Pervasiveness of multiple equilibria and nonexistence of equilibrium in theoretical models is illustrated. Evidence of these problems from market experiments is summarized. Possible solutions are evaluated.

Phone Icon Contact Us
Katrina Mullen (804) 697-8145