We consider partnerships among risk-averse professionals endowed with (i) a risky and personally-costly production technology and (ii) a personally-costly monitoring technology providing contractible noisy signals about partners' productive efforts. Partners shirk both production and monitoring...

We consider partnerships among risk-averse professionals endowed with (i) a risky and personally-costly production technology and (ii) a personally-costly monitoring technology providing contractible noisy signals about partners' productive efforts. Partners shirk both production and monitoring...

In this paper, we examine how financial leverage and information quality interactively affect the equilibrium investment and effort decisions, therefore affect overall efficiency. We find that when the financial leverage is in an intermediate range, overall efficiency may decrease in information...