We explain and provide evidence of effects of leverage on pricing. Our model identifies two interacting effects: firms set higher prices (under-invest in market share) if they have more debt, but engage in dynamic risk-shifting by setting lower prices (over-invest in market share) just prior to...

We explain and provide evidence for effects of leverage on pricing. Our model identifies two effects that either counteract or reinforce each other, depending on the debt maturity structure: (i) firms set higher prices (underinvest in market share) if they have more debt, and (ii) firms engage...

We explain and provide evidence for effects of leverage on pricing. Our model identifies two effects that either counteract or reinforce each other, depending on the debt maturity structure: (i) firms set higher prices (underinvest in market share) if they have more debt, and (ii) firms engage...