may be ex ante efficient. This happens through costly legal dispute which arises when contract terms are missing for the … undesirable outcomes. We show that an optimal contract needs only to specify the obligation for the more litigious party to assure …

If contract enforcers must be randomly selected from the same population and thus are as opportunistic as ordinary …

debt changes the incentive to provide the manager with stronger performance-related incentives ("contract substitution …

may make the lending altogether unprofitable. Second, banks can have an incentive to offer a debt contract and additional … equity contracts to intermediate debtors. This combination, however, is in turn dominated by a simple debt contract that is … to avoid the contract with the highest chance of delivery: that contract attracts all bad entrepreneurs. …