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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, ...
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 ...