In this paper we analyze how a firm might protect quasi-rents in an environmentof imperfect capital markets, where switching lenders is costly to the borrower, andcontracts are incomplete. As switching costs make the firm vulnerable to ex-postexploitation, it may want to diversify lending in...

This paper analyzes how agency problems in nancial contracting determine risk-taking andinvestment. In perfect capital markets a risk-neutral rm would invest until the expectedmarginal return equals the interest rate. However, as rms with little net-worth face agencycost in nancial contracting...

This note analyses investment and risk-taking in a simple agency model of public regulation/procurement borrowed from Laffont & Tirole (1993). We show that the principal will overinvest or underinvest depending on whether investment is marginally more productive in bad or in good states. Due to...

In monetary economics it is argued that due to agency cost in financial contracting a reduction of a firm's net worth will transmit into a decline of investment. This paper shows that the microeconomic foundation of this 'balance-sheet-channel' is dubious. Contrary to a common claim agency...

In most industrialized countries electric power tariffs for residentialconsumption are higher than for industrial customers. In Russia, asin some other transition countries, this pattern is reversed, but at thesame time the overall level of tariffs is very low. Cross subsidization ofresidential...

The paper analysis rental contracts in a two-period model of thehousing market with uncertain 'outside option', accounting for non-contractible mobility-cost and consumption indivisibilities. The mainndings are: (i) Bilaterally ecient contracts set rents which are lessvolatile than market rents...

...The first section takes a brief look at the history of rent controls. Initially mostmeasures were aimed at preventing landlords from reaping what was perceived tobe a ‘windfall profit’ resulting from some sort of unexpected emergency. It alsodemonstrates the diversity of rent control...

Restricted access to finance is often stated as one of the main obstaclesto the development of the SME sector in Russia. In this paper, wepropose a new lending strategy that allows private banks to profitablyincrease financing of this sector in spite of being at a disadvantagecompared to the...

Russian natural gas is delivered to Western Europe by pipelines, running throughUkraine, Poland and other transit countries. We derive the bargaining power of thedifferent players along this supply chain endogenously from the architecture of thetransmission system and its possible extensions by...