Koeppl, Thorsten; Monnet, Cyril; Quintin, Erwan - In: Economic Theory 55 (2014) 1, pp. 161-183
We study how the efficient choice of contract enforcement interacts with the efficient allocation of capital in a … simple production economy. Contract enforcement makes trade possible but requires an aggregate investment of capital that is … invest more resources in enforcement. Furthermore, implementing the optimal allocation requires a specific distribution of …