We consider a dynamic screening model where the agent may go bankrupt due to, for example, cash constraints. We model bankruptcy as a verifiable event that occurs whenever the agent makes a per period loss. This leads to less stringent truth-telling constraints than those considered in the...

A Bayesian supply function equilibrium is characterized in a market where firms have private information about their uncertain costs. It is found that with supply function competition, and in contrast to Bayesian Cournot competition, competitiveness is affected by the parameters of the...

In a standard financial market model with asymmetric information with a finite number N of risk-averse informed traders, competitive rational expectations equilibria provide a good approximation to strategic equilibria as long as N is not too small: equilibrium prices in each situation converge...

A finite number of sellers (n) compete in schedules to supply an elastic demand. The costs of the sellers have uncertain common and private value components and there is no exogenous noise in the system. A Bayesian supply function equilibrium is characterized; the equilibrium is privately...

The paper studies procurement contracts with pre-project investigations in the presence of adverse selection and moral hazard. To model the procurer's roblem, we extend a standard sequential screening model to endogenous information acquisition with moral hazard. The optimal contract displays...

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer ' the seller ' follows from a non-trivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device, whence...