Collateralized assets and asymmetric information

Introducing assets backed by physical collateral, we extend the [Cornet, B., De Boisdeffre, L., 2002. Arbitrage and price revelation with asymmetric information and incomplete markets. Journal of Mathematical Economics 38, 393–490.] model of asymmetric information to allow for default. We show that, independently of the financial-informational structure, equilibrium exists.

https://www.sciencedirect.com/science/article/abs/pii/S0304406807001000