Region Focus

Winter 2008

Building a Better Market

The theory of mechanism design teaches us how the right financial contracts and intermediaries can give borrowers and lenders a helping hand
By Vanessa Sumo

Related Links

Coase, Ronald H. "The Nature of the Firm." Economica, New Series, November 1937, vol. 4, no. 16, pp. 386-405.


Boyd, John H., and Edward C. Prescott. "Financial Intermediary Coalitions." Journal of Economic Theory, 1986, vol. 38, pp. 211-232.


Lacker, Jeffrey M., and John A. Weinberg. "A Coalition Proof Equilibrium for a Private Information Credit Economy." Economic Theory, 1993, vol. 3, pp. 279-296.


Lacker, Jeffrey M., and John A. Weinberg. "Optimal Contracts under Costly State Falsification," Journal of Political Economy, 1989, vol. 97, pp.1345-1363.


Townsend, Robert M. "Optimal Contracts and Competitive Markets with Costly State Verification." Journal of Economic Theory, October 1979, vol. 21, no. 2, pp. 265-293.

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