Agent or Borrower? An Incentive of Moral Hazard with China Commercial Guarantee Company

Table 2

Payoff structure of bank, borrower, and guarantee company.

	Bank	Borrower	Guarantee company	Total payoff
𝑅≥𝐿1+𝑖+𝑔−𝐶	𝐿(1+𝑖)	𝑅−𝐿1+𝑖+𝑔	𝐿𝑔	𝑅
𝐿(1+𝑖)−𝐶−𝐺−𝐿𝑔 ≤𝑅<𝐿(1+𝑖)−𝐶−𝐿𝑔	𝐿(1+𝑖)	−𝐶−𝐿𝑔	𝑅+𝐶+𝐿𝑔−𝐿(1+𝑖)	𝑅
𝑅≥𝐿(1+𝑖)−𝐶−𝐺−𝐿𝑔	𝑅+𝐶+𝐺	−𝐶	−𝐺	𝑅