We offer a new explanation of equilibrium rationing. As is well known, a monopolist selling a durable good and not able to commit to a price sequence has an incentive to lower the price once the consumers with the greatest willingness to pay have bought, but this induces consumers to postpone...

This paper develops a theoretical model in which firms may choose multiple banking relationships to reduce the risk that financing will be denied by ‘relationship banks’ should the latter experience liquidity problems and refuse to roll over lines of credit. The inability to refinance from...