Overcoming Adverse Selection: How Public Intervention Can Restore Market Functioning
研究了政府如何通过回购和股权注入清理市场中最弱的资产，减少逆向选择以重启市场，同时控制干预成本，且市场的存在不带来福利损失。
The paper provides a first analysis of market jump starting and its two-way interaction between mechanism design and participation constraints. The government optimally overpays for the legacy assets and cleans up the market of its weakest assets, through a mixture of buybacks and equity injections, and leaves the firms with the strongest legacy assets to the market. The government reduces adverse selection enough to let the market rebound, but not too much, so as to limit the cost of intervention. The existence of a market imposes no welfare cost.