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Debt contracts with ex-ante and ex-post asymmetric information: an example

Carlier, G and Renou, L (2006) 'Debt contracts with ex-ante and ex-post asymmetric information: an example.' Economic Theory, 28 (2). pp. 461-473. ISSN 0938-2259

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Abstract

We 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.

Item Type: Article
Uncontrolled Keywords: Debt contracts; Diversity of opinions; Screening; Costly monitoring; Pooling.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 07 Jan 2013 11:34
Last Modified: 06 Jan 2022 14:37
URI: http://repository.essex.ac.uk/id/eprint/5013

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