Debt contracts with ex-ante and ex-post asymmetric information: an example
AbstractWe consider a simple model of lending and borrowing combining two informational problems: adverse selection and costly state verification. Our analysis highlights the interaction between these two informational problems. We notably show that the higher the monitoring cost, the less discriminating the optimal menu of contracts is. Copyright Springer-Verlag Berlin/Heidelberg 2006
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 28 (2006)
Issue (Month): 2 (06)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Guillaume Carlier & Ludovic Renou, 2005. "Debt Contracts with ex-ante and ex-post Asymmetric Information: An Example," School of Economics Working Papers 2005-03, University of Adelaide, School of Economics.
- G. Carlier & L. Renou, 2005. "Debt contracts with ex-ante and ex-post asymmetric information: an example," Game Theory and Information 0502003, EconWPA.
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- G3 - Financial Economics - - Corporate Finance and Governance
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