scholarly journals Debt contracts with ex-ante and ex-post asymmetric information: an example

2006 ◽  
Vol 28 (2) ◽  
pp. 461-473 ◽  
Author(s):  
G. Carlier ◽  
L. Renou
2018 ◽  
Vol 2018 ◽  
pp. 1-13
Author(s):  
Lei Shi ◽  
Lu Zhang ◽  
Masamitsu Onishi ◽  
Kiyoshi Kobayashi ◽  
Dashuang Dai

This study analyses the contractual efficiency of public-private partnership (PPP) infrastructure projects, with a focus on two financial aspects: the nonrecourse principal and incompleteness of debt contracts. The nonrecourse principal releases the sponsoring companies from the debt contract when the special purpose vehicle (SPV) established by the sponsoring companies falls into default. Consequently, all obligations under the debt contract are limited to the liability of the SPV following its default. Because the debt contract is incomplete, a renegotiation of an additional loan between the bank and the SPV might occur to enable project continuation or liquidation, which in turn influences the SPV’s ex ante strategies (moral hazard). Considering these two financial features of PPP infrastructure projects, this study develops an incomplete contract model to investigate how the renegotiation triggers ex ante moral hazard and ex post inefficient liquidation. We derive equilibrium strategies under service fees endogenously determined via bidding and examine the effect of equilibrium strategies on contractual efficiency. Finally, we propose an optimal combination of a performance guarantee, the government’s termination right, and a service fee to improve the contractual efficiency of PPP infrastructure projects.


2019 ◽  
Vol 18 (5) ◽  
pp. 2677-2714 ◽  
Author(s):  
Teck Yong Tan

Abstract This paper studies how reduced oversight creates an incentive for process innovation. With incomplete contracts, tight monitoring of workers creates a ratchet effect of innovation. Under reduced oversight, a worker accrues private knowledge about his innovation, which serves as a substitute for its inalienable property rights. The resulting asymmetric information generates an information rent for the worker, which feeds back as an innovation incentive ex ante. A weak early production incentive is required to complement it. Innovations are generally underutilized ex post, and mildly successful innovations are not distinguished from failed innovation attempts.


CFA Digest ◽  
2003 ◽  
Vol 33 (3) ◽  
pp. 8-9
Author(s):  
Ann C. Logue
Keyword(s):  
Ex Post ◽  

1993 ◽  
Vol 108 (2) ◽  
pp. 135-138
Author(s):  
Pierre Malgrange ◽  
Silvia Mira d'Ercole
Keyword(s):  
Ex Post ◽  

Author(s):  
Richard Adelstein

This chapter elaborates the operation of criminal liability by closely considering efficient crimes and the law’s stance toward them, shows how its commitment to proportional punishment prevents the probability scaling that systemically efficient allocation requires, and discusses the procedures that determine the actual liability prices imposed on offenders. Efficient crimes are effectively encouraged by proportional punishment, and their nature and implications are examined. But proportional punishment precludes probability scaling, and induces far more than the systemically efficient number of crimes. Liability prices that match the specific costs imposed by the offender at bar are sought through a two-stage procedure of legislative determination of punishment ranges ex ante and judicial determination of exact prices ex post, which creates a dilemma: whether to price crimes accurately in the past or deter them accurately in the future. An illustrative Supreme Court case bringing all these themes together is discussed in conclusion.


Land ◽  
2020 ◽  
Vol 9 (3) ◽  
pp. 70 ◽  
Author(s):  
Quentin Grislain ◽  
Jeremy Bourgoin ◽  
Ward Anseeuw ◽  
Perrine Burnod ◽  
Eva Hershaw ◽  
...  

In recent decades, mechanisms for observation and information production have proliferated in an attempt to meet the growing needs of stakeholders to access dynamic data for the purposes of informed decision-making. In the land sector, a growing number of land observatories are producing data and ensuring its transparency. We hypothesize that these structures are being developed in response to the need for information and knowledge, a need that is being driven by the scale and diversity of land issues. Based on the results of a study conducted on land observatories in Africa, this paper presents existing and past land observatories on the continent and proposes to assess their diversity through an analysis of core dimensions identified in the literature. The analytical framework was implemented through i) an analysis of existing literature on land observatories, ii) detailed assessments of land observatories based on semi-open interviews conducted via video conferencing, iii) fieldwork and visits to several observatories, and iv) participant observation through direct engagement and work at land observatories. We emphasize that the analytical framework presented here can be used as a tool by land observatories to undertake ex-post self-evaluations that take the observatory’s trajectory into account, or in the case of proposed new land observatories, to undertake ex-ante analyses and design the pathway towards the intended observatory.


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