scholarly journals Optimal Contracts and Competitive Markets With Costly State Verification

1979 ◽  
Author(s):  
Robert M. Townsend
Keyword(s):  
Competitive Markets ◽  
Optimal Contracts ◽  
Costly State Verification

scholarly journals Optimal contracts in a dynamic costly state verification model

2005 ◽  
Vol 26 (4) ◽  
pp. 867-885 ◽  
Author(s):  
Cyril Monnet ◽  
Erwan Quintin
Keyword(s):  
Optimal Contracts ◽  
Costly State Verification ◽  
Verification Model

scholarly journals Disputes, debt, and equity

2019 ◽  
Vol 14 (3) ◽  
pp. 887-925 ◽  
Author(s):  
Alfred Duncan ◽  
Charles Nolan
Keyword(s):  
Incentive Contracts ◽  
Debt Financing ◽  
Risk Averse ◽  
Debt Contracts ◽  
Optimal Contracts ◽  
Costly State Verification ◽  
Highly Correlated ◽  
Verification Model

We show how the prospect of disputes over firms' revenue reports promotes debt financing over equity. This is demonstrated in a costly state verification model with a risk‐averse entrepreneur. The prospect of disputes encourages incentive contracts that limit penalties and avoid stochastic monitoring, even when the lender can commit to stochastic monitoring. Consequently, optimal contracts shift from equity toward standard debt. In short, when audit signals are weakly correlated with true incomes, standard debt contracts emerge as optimal; if audit signals are highly correlated with true incomes, optimal contracts resemble equity. When audit costs are sufficiently high, stochastic monitoring may be optimal. Optimal standard debt contracts under imperfect audits are shown to reproduce key empirical facts of U.S. firm borrowing.

Does quality customer service pay in competitive markets?

2010 ◽  
Author(s):  
Jennifer Nieman-Gonder ◽  
Terri Shapiro ◽  
Nimmy Mathew
Keyword(s):  
Customer Service ◽  
Competitive Markets

Structural Alternatives of Russia’s Social and Economic Development

2008 ◽  
pp. 71-85 ◽  
Author(s):  
A. Shastitko ◽  
S. Afontsev ◽  
S. Plaksin
Keyword(s):  
Economic Development ◽  
Comparative Study ◽  
Economic System ◽  
Competitive Markets ◽  
Russian Government ◽  
Social And Economic Development

The article contains a general comparative study of four strategies of social and economic development: "Inertia", "Renter", "Mobilization", and "Modernization". The context for comparison is explanation of correlation between adaptive features of Russia’s contemporary economic system and particularities of the mentioned strategies with corresponding ways of managing economic development problems. The comparison is based on description of strategies essence, ways and tools to achieve results. Perspectives of achieving strategic purposes as well as expected results of implementation of each strategy are shown. Special comparative study of four strategies on the base of development of competitive markets as one of strategic aims of the Russian government is presented.

Official Advice Improves Mortgage-Holders’ Perceptions of Switching: Experimental Evidence

2019 ◽  
Author(s):  
Shane Timmons
Keyword(s):  
Interest Rate ◽  
Experimental Evidence ◽  
Consumer Protection ◽  
Policy Development ◽  
Switching Process ◽  
Competitive Markets ◽  
Protection Agency ◽  
Change Perceptions ◽  
Before And After ◽  
The Individual

Encouraging consumers to switch to lower-rate mortgages is important both for the individual consumer’s finances and for functioning competitive markets, but switching rates are low. Given the complexity of mortgages, one potential regulatory intervention that may increase switching rates is to provide independent advice on how to select good mortgage products and how to navigate the switching process. Working with a government consumer protection agency, we conducted an experiment with mortgage-holders to test whether such advice alters perceptions of switching. The experiment tested how (i) the attributes of the offer, (ii) perceptions about the switching process, (iii) individual feelings of competence and (iv) comprehension of the product affect willingness to switch to better offers, both before and after reading the official advice. The advice made consumers more sensitive to interest rate decreases, especially at longer terms. It also increased consumers’ confidence in their ability to select good offers. Overall, the findings imply that advice from policymakers can change perceptions and increase switching rates. Moreover, the experiment demonstrates how lab studies can contribute to behaviourally-informed policy development.

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