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

Table 3

Payoff structure with extra collateral.

	Bank	Borrower	Guarantee company	Total payoff
𝑅≥𝐿1+𝑖+𝑔−𝐶−𝐶2	𝐿(1+𝑖)	𝑅−𝐿1+𝑖+𝑔	𝐿𝑔	𝑅
𝐿(1+𝑖)−𝐶−𝐺−𝐿𝑔−𝐶2≤𝑅<𝐿(1+𝑖)−𝐶−𝐿𝑔−𝐶2	𝐿(1+𝑖)	−𝐶−𝐶2−𝐿𝑔	𝑅+𝐶+𝐶2+𝐿𝑔−𝐿(1+𝑖)	𝑅
𝑅≥𝐿(1+𝑖)−𝐶−𝐺−𝐿𝑔	𝑅+𝐶+𝐺	−𝐶−𝐶2	−𝐺+𝐶2	𝑅