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This paper investigates the design of incentives in a dynamic adverse selection framework when agents’ production technologies display learning effects and agents’ rate of learning is private knowledge. In a simple two-period model with full commitment available to the principal, we show...
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This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient … supplier. While investment promotion is usually regarded as a pro-competitive effect of ED, our paper shows that it may be the … very reason why a contract that forecloses a more efficient supplier is signed. Absent the effect on investment, the …
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