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endowment shock is small enough, the optimal contract prevents agents from reaching autarky tomorrow and, thus, from being …
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, reducing the private firm discount. These findings suggest that these contract structures are an important channel through … titled, How Information Asymmetry Affects Contract Design: Evidence from Seller-Financed Acquisitions …
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The author examines the impact of incomplete risk-sharing on growth and welfare. The source of market incompleteness in the economy is private information: a household's idiosyncratic productivity shock is not observable by others. Risk-sharing between households occurs through long-term...
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