This article analyzes competition between two asymmetric networks, an incumbent and a new entrant. Networks compete in …

giving more to all entrepreneurs. In equilibrium, competition for the best entrepreneurs forces intermediaries to offer …. Competition among financial intermediaries always forces them to fund projects with negative expected returns both from a private … scale. The three main features of our framework (competition, adverse selection, and limited liability) are necessary to get …

competitiveness and sufficiently separates individuals who choose different effort levels, the market allocation is Pareto superior to … a social planner’s allocation. We construct a specific market game that naturally generates robust equilibria with these …