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

G. Carlier () and Ludovic Renou

Economic Theory, 2006, vol. 28, issue 2, 473 pages

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. Copyright Springer-Verlag Berlin/Heidelberg 2006

Keywords: Debt contracts; Diversity of opinions; Screening; Costly monitoring; Pooling. (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (10)

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Working Paper: Debt Contracts with ex-ante and ex-post Asymmetric Information: An Example (2005)
Working Paper: Debt contracts with ex-ante and ex-post asymmetric information: an example (2005)
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DOI: 10.1007/s00199-005-0632-7

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