1. 1. More precise, default is something which is caused by, or called by, the lenders as a possible reaction if borrowers do not honor their credit obligations.
2. 2. A threat is noncredible if it is unprofitable to execute itafterthe threatened action has been taken. In game theoretical terms we say that threat strategy is not subgame perfect for noncredible threats (seeFriedman[1986 ,pp. 77 -82 ] for noncredible threats and subgame perfectness). Threats which are not subgame perfect (and thus noncredible) suffer from time inconsistency (see, e.g., Hellwig[1986]).
3. 3. If (a) and (b) are satisfied then the allocation of payoffs supported by K is in the core and the existence of K is suggested. The core might be empty and there might be no coalition be justified this way. However, the weakening of condition (b) or the introduction of the potential of threats and counterthreats may stabilize the existence of K even when (b) does not apply. This is the message of the bargaining sets, the nucleus, the kernel and related solution concepts (see, e.g., Friedman[1986 ]). I do not want to go into a discussion of these concepts, but merely point out that none of them assumes ?homogeneity? as a precondition of coalition formation.
4. 4. Why are Asian or African debtor countries not considered as potential coalition partners to Latin American countries in Hojman'sstudy?
5. 5. For further discussion of the public choice aspect, seeChakravarty, and Holler[1987 ] and Picht [1987].