This paper studies the design of a contest between two possible budget constrained players when the organizer of the contest ignores their budgets and whose objective is maximizing aggregate effort. First we define the optimal effort as the maximum levels of effort achievable under a complete...

Due to tougher lending standards, Rent-to-Own (RTO) contracts are getting popular. In a RTO contract, a tenant signs a lease with the option to buy a house at a predetermined purchase price. That is, the tenant receives a call option. RTO contracts allow potential financially constrained...