In this article we analyze an informed firm's choice of financial structure when the financing contract is observed not only by the capital market but also by a second uninformed party, such as a competing firm. The informed firm's gross profit is endogenous, because the second party's action...

This article analyzes the effect of product-market competition on managerial incentives. In contrast to Hart (1983a), I show that competition may actually exacerbate the incentive problem. The difference in results derives from our different assumptions about managerial preferences. The...

This article models the problem of designing predation policy as one of structuring incentives so that firms choose not to practice predation but to engage in nonpredatory competition. The government decides how intensively to search for possible predatory incidents, how thoroughly to...