Costly monitoring, dynamic incentives, and default
نویسندگان
چکیده
We study optimal dynamic financial contracts between a lender and a borrower in the presence of costly state verification. The efficient contract is such that (1) interim monitoring can prevent future inefficient liquidation of investment projects that are due to informational asymmetries and (2) two levels of bankruptcy can be distinguished, one that leads to monitoring and the other that leads to liquidation.
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ورودعنوان ژورنال:
- J. Economic Theory
دوره 159 شماره
صفحات -
تاریخ انتشار 2015