| Author(s): |
prof. Ing. Karel Janda M.A., Dr., Ph.D.,
|
| Type: |
IES Working Papers |
| Year: |
2006 |
| Number: |
25 |
| ISSN / ISBN: |
|
| Published in: |
IES WP 2006/25 |
| Publishing place: |
Prague |
| Keywords: |
Costly State Verification, Multiple Lenders, Debt |
| JEL codes: |
C72, D82, G33 |
| Suggested Citation: |
Janda, K., (2006). “ Optimal Deterministic Debt Contracts ” IES Working Paper 25/2006, IES FSV. Charles University |
| Grants: |
IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
|
| Abstract: |
This paper extends the costly enforcement model of optimal financing to the case of investment projects financed by several lenders. We consider the asymmetric situation when only one lender is a big strategic investor. All other lender are small passive investors. We first provide the sufficient and necessary condition for renegotiation proofness. Then we show that the optimal verification is deterministic. We also discuss the conditions under which the optimal contract is a debt contract. |
| Downloadable: |
WP 2006_25_Janda
|
