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

G. Carlier and Ludovic Renou
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G. Carlier: Universite Paris IX-Dauphine, CEREMADE, Place du Marechal De Lattre De Tassigny,

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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.

Keywords: debt contracts; diversity of opinions; screening; costly monitoring; pooling. (search for similar items in EconPapers)
JEL-codes: D8 G3 (search for similar items in EconPapers)
Date: 2005-02-03
Note: Type of Document - pdf. See Ludovic Renou webpage for a technical appendix.
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http://129.3.20.41/eps/game/papers/0502/0502003.pdf (application/pdf)

Related works:
Journal Article: Debt contracts with ex-ante and ex-post asymmetric information: an example (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:0502003

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