The Stiglitz-Weiss Condition for Rationing and Endogenous Self-finance: A Comment

Faynzilberg, Peter S.

doi:10.2139/ssrn.1151377

Abstract

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The Stiglitz-Weiss Condition for Rationing and Endogenous Self-finance: A Comment

Peter S. Faynzilberg

The Aleph Group, LLC

August 2008

Abstract:
Contrary to the assertions of de Meza and Webb (2006), we find that (i) there is no conflict between borrowing costs and the condition for rationing put forth in Stiglitz and Weiss (1981), and (ii) entrepreneurs finance production solely by debt. It is shown also that under the timing conventions of Stiglitz and Weiss (1981) borrowers use either none or all of their liquid endowments.

Number of Pages in PDF File: 10

Keywords: Incomplete information, investment, moral hazard

JEL Classification: D41, D45, D53

working papers series

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Date posted: June 27, 2008 ; Last revised: September 16, 2008

Suggested Citation

Faynzilberg, Peter S., The Stiglitz-Weiss Condition for Rationing and Endogenous Self-finance: A Comment (August 2008). Available at SSRN: http://ssrn.com/abstract=1151377 or http://dx.doi.org/10.2139/ssrn.1151377

Contact Information

Peter S. Faynzilberg (Contact Author)

The Aleph Group, LLC ( email )

Plainfield, NJ 07060
United States