| Tekijä: | Acemoglu, D. |
| Otsikko: | Credit market imperfections and the separation of ownership from control |
| Lehti: | Journal of Economic Theory
1998 : FEB, VOL. 78:2, p. 355-381 |
| Asiasana: | CREDIT MARKETS MODELS FINANCIAL INTERMEDIARIES SMALL BUSINESS |
| Kieli: | eng |
| Tiivistelmä: | The paper offers a model of credit markets with adverse selection and moral hazard. The equilibrium is highly inefficient, and the underlying reason is the zero-profit condition imposed by competing financial intermediaries which gives very high powered incentives to entrepreneurs. It is demonstrated in the paper that when entrepreneurs can hire a manager to run their projects, the inefficiencies are prevented. This is because the manager is not teh residual claimant of the returns, and hence has low powered incentives. That's why the divergence of interests btw. managers and owners may have beneficial effects as well as the often emphasized costs. |
SCIMA