Because of limited liability, insolvent banks have an incentive to continue lending to insolvent borrowers, in order to hide losses and gamble for resurrection, even though this is socially inefficient. We suggest a scheme that regulators could use to solve this problem. The scheme would induce...

Examines the optimal licensing agreement between thepatent holder of a cost-cutting technology and firms that have various uses forthe innovation. This is accomplished through the development of a model ofpatent licensing that integrates two important features largely unexplored inthe...