This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Equilibrium Allocation of Investment Capital in the Presence of Adverse Selection and Costly State Verification

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Boyd, John H
Smith, Bruce D

Additional information is available for the following registered author(s):

Abstract

We consider credit rationing in an environment with adverse selection and costly state verification. The presence of costly state verification permits debt contracts to emerge under conditions that we specify. When debt contracts are observed, so is credit rationing. This rationing occurs even if it is possible for rationed borrowers to bid up expected returns to lenders and hence is voluntary. We also show how the adverse selection and costly state verification problems interact and investigate how improvements in information gathering technology impact on the extent of credit rationing.

Download Info
To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Publisher Info
Article provided by Springer in its journal Economic Theory.

Volume (Year): 3 (1993)
Issue (Month): 3 (July)
Pages: 427-51
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:spr:joecth:v:3:y:1993:i:3:p:427-51

Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00199/index.htm

Order Information:
Web: http://link.springer.de/orders.htm

For technical questions regarding this item, or to correct its listing, contact: (Christopher F Baum).

Related research
Keywords:

Other versions of this item:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
  1. Reichlin, Pietro & Siconolfi, Paolo, 2000. "Optimal Debt Contracts and Moral Hazard Along the Business Cycle," CEPR Discussion Papers 2351, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Gersbach, H. & Uhlig, H., 1998. "Debt contracts, collapse and regulation as competition phenomena," Discussion Paper 1, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  3. Ludovic Renou, 2008. "Multi-lender coalitions in costly state verification models," Economic Theory, Springer, vol. 36(3), pages 407-433, September. [Downloadable!] (restricted)
  4. Edward J. Green & Soo-Nam Oh, 1991. "Can a "credit crunch" be efficient?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 3-17. [Downloadable!]
  5. Bénédicte Coestier & Nathalie Fombaron, 2003. "L'audit en assurance," THEMA Working Papers 2003-41, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
  6. Vesa Kanniainen & Rune Stenbacka, 1997. "Project Monitoring and Banking Competition under Adverse Selection," CIG Working Papers FS IV 97-23, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG), revised Oct 1998. [Downloadable!]
  7. Ludovic RENOU, 2003. "Beliefs about Beliefs and Endogenous Formation of a Multi-lender Coalition in a Costly State Verification Model," Economics Working Papers ECO2003/21, European University Institute. [Downloadable!]
  8. G. Carlier & L. Renou, 2005. "Debt contracts with ex-ante and ex-post asymmetric information: an example," Game Theory and Information 0502003, EconWPA. [Downloadable!]
    Other versions:
  9. Alberto Martin, 2008. "Adverse Selection, Credit, and Efficiency: the Case of the Missing Market," Economics Working Papers 1085, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2009. [Downloadable!]
  10. Stanley D. Longhofer, 1994. "Bankruptcy rules and debt contracting: on the relative efficiency of absolute priority, proportionate priority, and first-come, first-served rules," Working Paper 9415, Federal Reserve Bank of Cleveland. [Downloadable!]
  11. Stanley D. Longhofer, 1997. "Absolute priority rule violations, credit rationing, and efficiency," Working Paper 9710, Federal Reserve Bank of Cleveland. [Downloadable!]
Statistics
Access and download statistics

Did you know? The yearly budget of IDEAS is exactly $0: it relies entirely on volunteer work.

This page was last updated on 2009-11-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.