Existence and monotonicity of optimal debt contracts in costly state verification models

Ludovic Renou and Guillaume Carlier ()
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Guillaume Carlier: Bordeaux I, MAB, UMR CNRS 5466 and Bordeaux IV, GRAPE, UMR CNRS 5113

Economics Bulletin, 2003, vol. 7, issue 5, 1-9

Abstract: This note gives a simple proof of the existence and monotonicity of optimal debt contracts in simple models of borrowing and lending with ex-post asymmetric information, risk-averse agents and heterogeneous beliefs. Our argument is based on the concept of nondecreasing rearrangement and on a supermodular version of Hardy-Littlewood inequality.

JEL-codes: C6 G0 (search for similar items in EconPapers)
Date: 2003-09-11
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Citations: View citations in EconPapers (5)

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