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The loan contract with costly state verification and subjective beliefs

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  • Nielsen, Carsten Krabbe

Abstract

We provide a characterization of the optimal loan contract with costly state verification for the bank when the entrepreneur is risk averse and holds a belief different from that of the bank.

Suggested Citation

  • Nielsen, Carsten Krabbe, 2015. "The loan contract with costly state verification and subjective beliefs," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 89-105.
    • Handle: RePEc:eee:matsoc:v:78:y:2015:i:c:p:89-105
    DOI: 10.1016/j.mathsocsci.2015.10.002
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    Cited by:

    1. Vanda Tulli & Mauro Gallegati & Gerd Weinrich, 2019. "Financial conditions and supply decisions when firms are risk averse," Journal of Economics, Springer, vol. 128(3), pages 259-289, December.

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