The author shows that, in credit relationships, the choice of a lender may become a determinant of the extent of competition in downstream industries. In the presence of imperfect output markets and asymmetric information in financial markets, members of an industry may achieve a partial...

This paper provides a unifying framework for studying renegotiation of contracts in the presence of asymmetric information. We show that interim renegotiation does not constrain the set of contracts attainable with full commitment, regardless of whether renegotiation offers are made by the...