A firm entering a market often has to solve the problem that consumers do not know the quality of its product. The present paper, studying entry by a firm facing an incumbent rival, shows that the latter's reaction to entry can work as a substitute for the entrant's revelation costs. As a...

We model markets with adverse selection as matching markets. In a given match the informed or the uniformed party is chosen to make a take-it-or-leave-it proposal. This allows to account for the simultaneous presence of signaling and screening. Moreover, the possibility to dissolve matches...