Existence and monotonicity of optimal debt contracts in: Costly state verification models

Ludovic Renou, Guillaume Carlier

    Research output: Contribution to journalArticleResearchpeer-review

    4 Citations (Scopus)

    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.
    Original languageEnglish
    JournalEconomics Bulletin
    Volume7
    Issue number1
    Publication statusPublished - 1 Dec 2003

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