Default and Renegotiation: A Dynamic Model of Debt / Oliver Hart, John Moore.

Format:

Book

Author/Creator:

Hart, Oliver.

Contributor:

National Bureau of Economic Research.

Moore, John.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5907.

NBER working paper series no. w5907

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Default and Renegotiation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Summary:

We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and the repayment -- under the assumption that some debt contract is optimal. In the second part we consider a more general class of (non-debt) contracts, and derive sufficient conditions for debt to be optimal among these.

Notes:

Print version record

January 1997.