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

Ludovic Renou; Guillaume Carlier

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

Ludovic Renou, Guillaume Carlier

Research output: Contribution to journal › Article › Research › peer-review

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

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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.",

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AB - 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.

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JO - Economics Bulletin

JF - Economics Bulletin

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