This paper shows that stakeholders' multilateral opportunistic behaviour during financial distress may lead to premature liquidation of the firm. Consequently, the firm will use its capital structure to mitigate the costs of such opportunism. Specifically, the firm will reduce its debt so that...

We consider a simple model of lending and borrowing combining two informational problems: adverse selection and costly state verification. Our analysis highlights the interaction between these two informational problems. We notably show that the higher the monitoring cost, the less...

We study the tendering decisions of shareholders endowed with multiple shares to test game-theoretic models of the tendering process in the laboratory. An equilibrium outcome in which value-increasing takeovers always just succeed fails to emerge. Rather, tendered shares cycle around the...

This paper studies optimal menus of debt contracts such as secured debentures or bonds, in the presence of diversity of opinions between borrowers and lenders. We first characterize incentive compatible contracts, then prove the existence of optimal debt contracts. Finally, we are able to...

The main objective of this paper is to present a reading of The Arcades Project by Walter Benjamin in the context of the financial crisis, in particular, reflect from a few fragments of Benjamin's work appear to lie around a Black Swan. The recovery of the fragments of The Arcades seems...

The paper discusses the utilization of social complexity studies to enhance our understanding on many social phenomena. The discussions brings the concept of uncertainty in almost everything of social realms and makes some points related to the empirical findings of the power-law distributions...

We study the tendering decisions of shareholders endowed with multiple shares to test game-theoretic models of the tendering process in the laboratory. An equilibrium outcome in which value-increasing takeovers always just succeed fails to emerge. Rather, tendered shares cycle around the...

We propose a model of strategic interactions between a firm, its workers and its creditors in a dynamic, uncertain environment. We show that the fact that the firm can play off one stakeholders against another increases the likelihood and magnitude of concessions being made, either on a...