relational contracts are repeatedly newly negotiated during relationships. Negotiations take place with positive probability and …

We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the … first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and … the repayment -- under the assumption that some debt contract is optimal. In the second part we consider a more general …

This paper studies whether debt renegotiation mitigates debt overhang and improves investment efficiency. Using mergers … unsecured loans, providing further support that lender mergers improves investment efficiency for firms suffering from debt …

This paper develops a new model of debt renegotiation in a structural framework, that accounts for both taxes and … coupon reduction to creditors, given that the new coupon is chosen such that debt value remains constant. Our result shows … firm without hurting the creditors. This model of debt renegotiation can be viewed as a way of passing from a junk bond to …

We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the … first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and … the repayment -- under the assumption that some debt contract is optimal. In the second part we consider a more general …

We study how forcing financially distressed consumer debtors to repay a larger fraction of debt can lead them to …. Finally, we find that those debtors who misreported income had a lower probability of default on their debt repayment plans …