TY  - JOUR
ID  - publications1878
UR  - http://tse-fr.eu/pub/3416
IS  - 1
A1  - Faure-Grimaud, Antoine
A1  - Mariotti, Thomas
Y1  - 1999/10//
N2  - We argue that standard results proving that debt contracts can be obtained as the solution of an ex post adverse selection problem are derived without borrowers’ preferences satisfying a proper single crossing condition. For a simple example where this condition is restored, we show that the optimal financial contract is not a standard debt contract, but rather an option contract. This casts some doubts on the robustness of existing results.
PB  - Elsevier
JF  - Economics Letters
VL  - 65
SN  - 0165-1765
TI  - Optimal Debt Contracts and the Single-Crossing Condition
SP  - 85
AV  - none
EP  - 89
ER  -