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We model risky lending with costly state verification but without commitment to an audit strategy. The borrower under-reports with a positive probability in the successful state, and the lender audits with a positive probability after a report of failure.
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We model risky lending with costly state verification but without commitment to an audit strategy. The borrower under-reports with a positive probability in the successful state, and the lender audits with a positive probability after a report of failure.
Persistent link: https://www.econbiz.de/10005432412
Persistent link: https://www.econbiz.de/10005657383