Arbeitspapier
Are adverse selection models of debt robust to changes in market structure?
Many adverse selection models of standard one-period debt contracts are based on the following seemingly innocuous assumptions.First, entrepreneurs have private information about the quality of their return distributions.Second, return distributions are ordered by the monotone likelihood-ratio property.Third, financiers payoff functions are restricted to be monotonically non-decreasing in firm profits.Fourth, financial markets are competitive.We argue that debt is not an optimal contract in these models if there is only one (monopoly) financier rather than an infinite number of competitive financiers.
- Language
-
Englisch
- ISBN
-
952-462-094-4
- Bibliographic citation
-
Series: Bank of Finland Discussion Papers ; No. 28/2003
- Classification
-
Wirtschaft
- Event
-
Geistige Schöpfung
- (who)
-
Vauhkonen, Jukka
- Event
-
Veröffentlichung
- (who)
-
Bank of Finland
- (where)
-
Helsinki
- (when)
-
2003
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Vauhkonen, Jukka
- Bank of Finland
Time of origin
- 2003
Other Objects (12)
The entrepreneur's choice: Venture capital debt financing with adverse selection
Dynamic Insurance and Adverse Selection
Optimal insurance with adverse selection
Efficiency, Adverse Selection, and Production
Simultaneous Search and Adverse Selection
Simultaneous search and adverse selection
Nonexclusive competition under adverse selection
Information Aggregation and Adverse Selection
Competitive search markets with adverse selection
On the "adverse selection" of organizations
Adverse selection, learning, and competitive search
Loan Insurance, Adverse Selection and Screening
The entrepreneur's choice: Venture capital debt financing with adverse selection
Dynamic Insurance and Adverse Selection
Optimal insurance with adverse selection
Efficiency, Adverse Selection, and Production
Simultaneous Search and Adverse Selection
Simultaneous search and adverse selection
Nonexclusive competition under adverse selection
Information Aggregation and Adverse Selection
Competitive search markets with adverse selection
On the "adverse selection" of organizations
Adverse selection, learning, and competitive search
Loan Insurance, Adverse Selection and Screening
The entrepreneur's choice: Venture capital debt financing with adverse selection
Dynamic Insurance and Adverse Selection
Optimal insurance with adverse selection
Efficiency, Adverse Selection, and Production
Simultaneous Search and Adverse Selection
Simultaneous search and adverse selection
Nonexclusive competition under adverse selection
Information Aggregation and Adverse Selection
Competitive search markets with adverse selection
On the "adverse selection" of organizations
Adverse selection, learning, and competitive search