We characterize a monopolist's optimal offer of service plans when only informed customers know already at the contracting stage whether their demand is high or low, while uninformed customers may learn their demand only after incurring some costs, if at all. While informed customers purchase...

This paper studies the impact of buyer power on dynamic efficiency. We consider a bargaining model in which buyer power arises endogenously from size and may impact on a supplier's incentives to invest in lower marginal cost. We challenge the view frequently expressed in policy circles that the...

Wir untersuchen die Rolle von Vertragstypen und Zugangsregulierung auf Innovation und Wettbewerb. In einem Duopolmodell zeigen wir, dass Ex-post-Verträge, die nach den Investitionsentscheidungen getroffen werden, zu einer Welt führen, in der seltener Infrastruktur dupliziert wird, in der es...

We present a simple model of personal finance in which an incumbent lender has an information advantage vis-a-vis both potential competitors and households. In order to extract more consumer surplus, a lender with sufficient market power may engage in irresponsiblelending, approving credit even...

This article shows that investors financing a portfolio of projects may use the depth of their financial pockets to overcome entrepreneurial incentive problems. Competition for scarce informed capital at the refinancing stage strengthens investors’ bargaining positions. And yet,...

This paper presents a novel model of the lending process that takes into account that loan officers must spend time and effort to originate new loans. Besides generating predictions on loan officers’ compensation and its interaction with the loan review process, the model sheds light on why...

This paper shows that investors financing a portfolio of projects may use the depth of their financial pockets to overcome entrepreneurial incentive problems. Competition for scarce informed capital at the refinancing stage strengthens investors’ bargaining positions. And yet, entrepreneurs’...

This paper considers a firm that has to delegate to an agent, such as a mortgage broker or a security dealer, the twin tasks of approaching and advising customers. The main contractual restriction, in particular in light of related research in Inderst and Ottaviani (2007), is that the firm can...

This paper analyzes the implications of the inherent conflict between two tasks performed by direct marketing agents: prospecting for customers and advising on the product's suitability for the specific needs of customers. When structuring sales-force compensation, firms trade off the expected...