Existence and monotonicity of optimal debt contracts in costly state verification models
نویسندگان
چکیده
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. Citation: Renou, Ludovic and Guillaume Carlier, (2003) "Existence and monotonicity of optimal debt contracts in costly state verification models." Economics Bulletin, Vol. 7, No. 5 pp. 1−9 Submitted: August 7, 2003. Accepted: September 11, 2003. URL: http://www.economicsbulletin.com/2003/volume7/EB−03G00004A.pdf
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