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Digital
Library of the European Council for Modelling and Simulation |
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Title: |
Simulating Bankruptcy –
The Effects Of Bailouts |
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Authors: |
Marta
Fekete, Andras Oliver
Nemeth, Janos Szaz, Agnes Vidovics-Dancs |
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Published in:
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(2019). ECMS 2019
Proceedings Edited by: Mauro Iacono, Francesco Palmieri, Marco Gribaudo,
Massimo Ficco, European Council for Modeling and
Simulation. DOI: http://doi.org/10.7148/2019 ISSN:
2522-2422 (ONLINE) ISSN:
2522-2414 (PRINT) ISSN:
2522-2430 (CD-ROM) 33rd International ECMS Conference on Modelling and Simulation, Caserta, Italy, June 11th
– June 14th, 2019 |
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Citation
format: |
Marta Fekete,
Andras Oliver Nemeth, Janos Szaz,
Agnes Vidovics-Dancs (2019). Simulating Bankruptcy
– The Effects Of Bailouts, ECMS 2019
Proceedings Edited by: Mauro Iacono, Francesco Palmieri, Marco Gribaudo,
Massimo Ficco European Council for Modeling and
Simulation. doi: 10.7148/2019-0091 |
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DOI: |
https://doi.org/10.7148/2019-0091 |
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Abstract: |
In our paper,
we attempt to connect Kornai’s soft budget
constraint concept with the methodology used in finan-cial
option pricing. To our knowledge, this approach is unprecedented in the
literature. Due to the option pricing framework, the
effects of bailouts are not described as individual, socio-economic
phenomena, but as statistical ones. We show how Markov chains and Monte Carlo
simulation can be used in answering some questions aris-ing
in connection with hospitals’ bailouts. Our results suggest that in case of
more institutions, the effectiveness of the bailouts depends primary on how
much the liquid-ity and bankruptcy processes of the
hospitals are corre-lated – and not on the division
of the bailouts among them. |
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Full
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