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 language | English |
|---|---|
| Journal | Economics Bulletin |
| Volume | 7 |
| Issue number | 1 |
| Publication status | Published - 1 Dec 2003 |