Allocation Game
摘要
Subgame perfect Nash equilibria of the two-stage financial intermediation game introduced in Chapter 1 (Intermediation Game) can be derived by backward induction. This chapter analyzes the second stage. In the first stage of the game banks choose their interest rates. In the second stage they decide which loan applicants they accept. It is shown that for any given combination of interest rates, the second stage admits Nash equilibria. Furthermore, all Nash equilibria yield the same equilibrium deposit and loan volumes.