We propose a theory of security design in financing entrepreneurial production, positing that the investor can acquire costly information on the entrepreneur's project before making the financing decision. When the entrepreneur has enough bargaining power in security design, the optimal security...

We study the optimality of debt through the interaction between security design and information acquisition. An impatient seller designs a security backed by her asset in place and a buyer decides whether to buy the security in order to provide liquidity. Facing different securities, the buyer...

An issuer designs a contract and agents flexibly acquire information when deciding whether to accept it and provide liquidity. Unlike the existing literature, we do not impose any physical restriction on information structure to capture the idea of flexible information acquisition. Facing an...