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An assignment model of monitored finance
(Centro de Investigación y Docencia Económicas, División de Economía, 2014)
We develop an incentive contracting model of firm formation. Entrepreneurs of private equity firms who differ in net worth are required to borrow from institutional investors in order to finance start up projects. Investors, ...
Notes on the constrained suboptimality result by J.D. Geanakoplos and H.M. Polemarchakis (1986)
(Centro de Investigación y Docencia Económicas, División de Economía, 2009)
J. D. Geanakoplos and H. M. Polemarchakis (1986) prove the generic constrained suboptimality of equilibrium allocations in two period economies with incomplete markets. In these notes we provide a complete and detailed ...
Principal-agent assignment: implications for incentives and income distribution in tenancy relationships
(Centro de Investigación y Docencia Económicas, División de Economía, 2010)
I analyze a problem of assigning heterogeneous agents (tenants) to heterogeneous principals (landlords), where partnerships are subject to moral hazard in effort choice. The agents differ in wealth endowment and the ...
A two-sided matching model of monitored finance
(Centro de Investigación y Docencia Económicas, División de Economía, 2006)
We analyse a model of two-sided matching and incentive contracts where expert investors (venture capitalists) with different monitoring capacities are matched with firms with different levels of initial wealth. Firms do ...
Group reputations under anonymity
(Centro de Investigación y Docencia Económicas, División de Economía, 1998)
This paper studies incentives to invest in·'group reputations' when the latter result from the inability of certain agents to recognize their partners from past interactions; (i.e., anonymity). It does this by embedding ...