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Ludovic Renou and Guillaume Carlier
 
''Existence and monotonicity of optimal debt contracts in costly state verification models''
( 2003, Vol. 7 No.5 )
 
 
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.
 
 
Keywords:
JEL: G0 - Financial Economics: General
C6 - Mathematical Methods and Programming: General
 
Manuscript Received : Aug 07 2003 Manuscript Accepted : Sep 11 2003

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