Optimal contracts under imperfect enforcement revisited

dc.contributor.author	Hvide, Hans K.
dc.date.accessioned	2006-07-10T12:20:51Z
dc.date.available	2006-07-10T12:20:51Z
dc.date.issued	2005-08
dc.identifier.issn	1500-4066
dc.identifier.uri	http://hdl.handle.net/11250/163589
dc.description.abstract	We consider a financing game with costly enforcement based on Townsend (1979), but where monitoring is non-contractible and allowed to be stochastic. Debt is the optimal contract. Moreover, the debt contract induces creditor leniency and strategic defaults by the borrower on the equilibrium path, consistent with empirical evidence on repayment and monitoring behavior in credit markets.	en
dc.format.extent	245241 bytes
dc.format.mimetype	application/pdf
dc.language.iso	eng	en
dc.publisher	Norwegian School of Economics and Business Administration. Department of Finance and Management Science	en
dc.relation.ispartofseries	Discussion paper	en
dc.relation.ispartofseries	2005:4	en
dc.subject	costly state verification	en
dc.subject	debt contract	en
dc.subject	priority violation	en
dc.subject	strategic defaults	en
dc.title	Optimal contracts under imperfect enforcement revisited	en
dc.type	Working paper	en