An Equilibrium Model of Interbank Networks Based on Variational Inequalities
We develop an equilibrium model of credit network and trust network in the interbank market. We consider two kinds of decision makers including banks with liquidity surplus and banks with liquidity shortage. We model the behavior of the decision makers, derive the equilibrium conditions, and establi...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Wiley
2013-01-01
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| Series: | Advances in Mathematical Physics |
| Online Access: | http://dx.doi.org/10.1155/2013/175232 |
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| _version_ | 1832561583603056640 |
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| author | Shouwei Li Jianmin He |
| author_facet | Shouwei Li Jianmin He |
| author_sort | Shouwei Li |
| collection | DOAJ |
| description | We develop an equilibrium model of credit network and trust network in the interbank market. We consider two kinds of decision makers including banks with liquidity surplus and banks with liquidity shortage. We model the behavior of the decision makers, derive the equilibrium conditions, and establish the variational inequality formulation for interbank credit network and trust network. We then utilize the variational inequality formulation to obtain qualitative properties of the equilibrium pattern in terms of existence and uniqueness. |
| format | Article |
| id | doaj-art-a44f977c912e480fad7cc4893b43afd1 |
| institution | Kabale University |
| issn | 1687-9120 1687-9139 |
| language | English |
| publishDate | 2013-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Advances in Mathematical Physics |
| spelling | doaj-art-a44f977c912e480fad7cc4893b43afd12025-02-03T01:24:40ZengWileyAdvances in Mathematical Physics1687-91201687-91392013-01-01201310.1155/2013/175232175232An Equilibrium Model of Interbank Networks Based on Variational InequalitiesShouwei Li0Jianmin He1School of Economics and Management, Southeast University, Nanjing, Jiangsu 211189, ChinaSchool of Economics and Management, Southeast University, Nanjing, Jiangsu 211189, ChinaWe develop an equilibrium model of credit network and trust network in the interbank market. We consider two kinds of decision makers including banks with liquidity surplus and banks with liquidity shortage. We model the behavior of the decision makers, derive the equilibrium conditions, and establish the variational inequality formulation for interbank credit network and trust network. We then utilize the variational inequality formulation to obtain qualitative properties of the equilibrium pattern in terms of existence and uniqueness.http://dx.doi.org/10.1155/2013/175232 |
| spellingShingle | Shouwei Li Jianmin He An Equilibrium Model of Interbank Networks Based on Variational Inequalities Advances in Mathematical Physics |
| title | An Equilibrium Model of Interbank Networks Based on Variational Inequalities |
| title_full | An Equilibrium Model of Interbank Networks Based on Variational Inequalities |
| title_fullStr | An Equilibrium Model of Interbank Networks Based on Variational Inequalities |
| title_full_unstemmed | An Equilibrium Model of Interbank Networks Based on Variational Inequalities |
| title_short | An Equilibrium Model of Interbank Networks Based on Variational Inequalities |
| title_sort | equilibrium model of interbank networks based on variational inequalities |
| url | http://dx.doi.org/10.1155/2013/175232 |
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