THE USE OF COLLATERAL TO ENFORCE DEBT CONTRACTS

This paper analyzes the enforcement of debt contracts by treating the adherence to a contract as a matter of choice. Many commonly observed features of debt contracts, including the widespread use of collateral, are shown to be market responses to the costs of enforcing contracts. The characteristics of the collateral asset, including its marketability and expectations regarding its future price are shown to have important effects on the payments schedule of the debt. Since default is treated as a choice variable I am able to demonstrate the effects of macroeconomic fluctuations on default rates and lending decisions. Thus the analysis provides a basis for modeling the multiplier phenomena associated with the collapse of lending markets during severe depressions.     

EVALUATION OF A COMPUTER-ASSISTED SELF-INTERVIEW COMPONENT IN A COMPUTER-ASSISTED PERSONAL INTERVIEW SURVEY

This article examines respondent reactions to and performanceon a self-administered component of a computer-assisted personalinterview survey on self-images, conducted in the Detroit areain 1992. Although respondents were encouraged to complete thecomputer-assisted self-interview items them selves, only 79percent of those interviewed actually did so, while for 14 percentthe interviewer completed the items and for the remaining 7percent the interviewer read the questions while the respondententered the responses. We find that the decision to self-completethe computer-assisted self-interview items is re lated to factorssuch as respondents' age, education and com puter experience.This suggests that both capacity (literacy and vision) and motivationaffect the choice of completion. We also find differences insubstantive responses and data quality be tween self-completersand those who use interviewer assistance. These findings haveimplications for nonresponse error and data quality for self-administeredcomponents of interviews, particu larly those using computer-administration.     

THE CHALLENGE OF REVENUE SHARING WITH BUNDLED PRICING: AN APPLICATION TO MUSIC

Although bundling can substantially increase profits relative to standalone pricing, particularly for zero‐marginal‐cost information products, it has one major problem: bundling produces revenue that is not readily attributable to particular pieces of intellectual property, creating a revenue division problem. We evaluate several possible solutions using unique song valuation survey data. We find the Shapley value, a well‐motivated theoretical solution, is universally incentive compatible (all bundle elements fare better inside the bundle than under standalone pricing), but revenue‐sharing schemes feasible with readily available consumption data are not. Among feasible schemes, Ginsburgh and Zang's modified Shapley value performs best. (JEL C71, D79, L14)