In this paper we analyze how a firm might protect quasi-rents in an environmentof imperfect capital markets, where switching lenders is costly to the borrower, andcontracts are incomplete. As switching costs make the firm vulnerable to ex-postexploitation, it may want to diversify lending in...

This paper analyzes how agency problems in nancial contracting determine risk-taking andinvestment. In perfect capital markets a risk-neutral rm would invest until the expectedmarginal return equals the interest rate. However, as rms with little net-worth face agencycost in nancial contracting...

This note analyses investment and risk-taking in a simple agency model of public regulation/procurement borrowed from Laffont & Tirole (1993). We show that the principal will overinvest or underinvest depending on whether investment is marginally more productive in bad or in good states. Due to...

In monetary economics it is argued that due to agency cost in financial contracting a reduction of a firm's net worth will transmit into a decline of investment. This paper shows that the microeconomic foundation of this 'balance-sheet-channel' is dubious. Contrary to a common claim agency...

This paper develops a principal-agent model of financial contracting in which optimal contracts resemble a combination of debt and equity. When defaulting on debt, the firm is punished by disruption of external funding. Such contracts however, invite rivals to compete more aggressively to...

This paper deals with optimal financial contracts which simultaneously provide payincentives and impose constraints on managerial control.

In most industrialized countries electric power tariffs for residentialconsumption are higher than for industrial customers. In Russia, asin some other transition countries, this pattern is reversed, but at thesame time the overall level of tariffs is very low. Cross subsidization ofresidential...

Ziel der Studie ist es, den Einfluß fiskalischer Rahmenbedingungen auf dierelative Vorteilhaftigkeit alternativer Formen der Kapitalanlage unter besondererBerücksichtigung von Wohnungsinvestitionen zu ermitteln. Auf einemKapitalmarkt in einer Welt ohne jegliche Staatseingriffe müßten die...