This paper provides an analysis of screening contracts in a complete but imperfect information environment as opposed to the usual incomplete information (Bayesian) environment. An agent faces a hold-up situation while making a cost-reducing specific investment that is not observed by the...

I provide a complete characterization of Nash implementable allocations of spending in prevention by judgement-proof injurers. This characterization is used to identify the optimal rule that allows for the maximum total spending in prevention. The optimal rule amounts to apply the negligence...

I consider the problem of the design of an optimal self-selecting contract scheme for a principal who is buying a good from an agent which has the opportunity of making a cost-reducing unobservable investment prior to the contracting stage. Because of a hold-up problem, the agent will randomizes...

We construct a model of valuation to assess the financial fragility of a set of firms in a closed economy. A firm is identified with a possibly infinite random sequence of benefits. Firms with negative benefits in a given period are said to be in distress and need liquidity to refinance their...

In this paper, I consider the problem of designing an optimal screening contract for a principal facing an agent whose type comes as a sequence that unfolds through time. Formally, the agent has a private ex ante type that stands for the expected value of his private ex post type. Under full...

I characterize a generalization of the negligence rule to assign compensating damages in an accident involving multiple tortfeasors. These tortfeasors have the opportunity to undertake spending in prevention and the rule is designed to provide them with the best incentives to do so. I study the...

We propose a valuation model for a bank which faces a bankruptcy risk. Banks are identified with a possibly infinite random sequence of net benefits. A bank is solvent as long as its benefits remain non-negative. To preserve distressed banks from destruction, banks will be pooled within a...