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 |