Multiple Lenders, Strategic Default, and Covenants
研究了投资者通过设计金融契约竞争以控制企业家在多个贷款中侧向交易和违约的能力，发现契约条款可能产生反竞争效应，导致大量低效配置，并提出类似担保基金的补贴机制来恢复竞争性配置。
We study capital markets in which investors compete by designing financial contracts to control an entrepreneur’s ability to side trade and default on multiple loans. We show that covenants may have anticompetitive effects: in particular, they prevent investors from providing additional funds and reduce the entrepreneur’s investment capacity. As a result, a large number of inefficient allocations is supported at equilibrium. We propose a subsidy mechanism similar to guarantee funds in financial markets that efficiently controls the entrepreneur’s side trading and sustains the competitive allocation as the unique equilibrium one.