From Tirole exercise $3\mathrm{.}15.$

Consider the basic, fixed$-$investment model $($the investment is I, the entrepreneur borrows

I $$A; the probability of success is pH $($no private benefit$)$ or pL $=$ pH $$p $($private benefit

B$),$ success $($failure$)$ yields verifiable profit R $($respectively $0)).$ There are two variants,

$$A$$ and $$B$,$ of the projects, which differ only with respect to $$riskiness$$:

p

A

HR

A

H $=$ p

B

HR

B

H but p

A

H $>$ pB

H

so project B is $$riskier$.$ The investment cost is the same for both variants and, furthermore,

p

A

H $$ p

A

L $=$ p

B

H $$ p

B

L

Which variant is less prone to credit rationing?Question $1$

From Tirole exercise $3\mathrm{.}15.$

Consider the basic, fixed$-$investment model $($the investment is I, the entrepreneur borrows

$I-A$; the probability of success is $p_H($no private benefit$)$ or $p_L=p_H-p($private benefit

$B),$ success $($failure$)$ yields verifiable profit $R($respectively $0)).$ There are two variants,

$"$A$"$ and $"$B$",$ of the projects, which differ only with respect to "riskiness":

$p_H^A{R}_H^A=p_H^B{R}_H^B,$ but $,p_H^A>p_H^B$

so project $B$ is "riskier". The investment cost is the same for both variants and, further$-$

more,

$p_H^A-p_L^A=p_H^B-p_L^B$

Which variant is less prone to credit rationing?