ECON 319 - Economic Crisis : Assignment #6
Use an economic model that we covered in class, either a game or an individual
choice under risk model, to model and explain the following in the run up to the 2008
financial crisis in the US. Use the simplest model you can to illustrate, and the
solution to your model must be consistent with behavior at that time:
1) The moral hazard induced by implicit government insurance for an investor
purchasing a GSE MSB (individual choice).