Financial contracts with several types of agents

Laura Constantin, Ștefan Virgil Iacob and Dana Luiza Grigorescu
Additional contact information
Laura Constantin: Bucharest University of Economic Studies, Romania
Ștefan Virgil Iacob: “Artifex” University of Bucharest, Romania
Dana Luiza Grigorescu: Bucharest University of Economic Studies, Romania

Theoretical and Applied Economics, 2021, vol. XXVIII, issue 3(628), Autumn, 45-56

Abstract: The article analyses the optimal financial contracts with several types of agents, studying the situation of informational symmetry (symmetrical information) and the situation of informational asymmetry (asymmetric information). In the situation of informational symmetry, the equilibrium point between the principal (decision maker, for example the bank) and the agent (a natural or legal person) is determined, respectively the optimal transfer (rate) and the optimal amount that the agent can borrow. The two main characteristics of the contract are highlighted, represented by the situation of Pareto efficiency (Pareto optimality) and the situation in which the Agent obtains exactly the minimum threshold reserved by the market. In the situation of informational asymmetry, it is solved with the help of informational rents and the solution is compared with the first rank solution, where we have symmetrical information. The characteristics of the contract are highlighted, namely the situation in which the efficiency of Pareto is kept only for the efficient agent who obtains an informational rent. For the other agents, the solution is no longer Pareto - optimal. Following the described analysis, models will be obtained that are classified in relation to the types of agent: rich, good payers or not and good professionals.

Keywords: financial contracts; agents; information symmetry; balance; market. (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://store.ectap.ro/articole/1554.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=1554&rid=144 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:3(628):y:2021:i:3(628):p:45-56

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().