I consider an investor who can acquire a costly signal about an entrepreneur's project. The investor's problem is that uninformed investors can compete to provide funding and his contract offer conveys information to the entrepreneur about project payoffs, affecting the attractiveness of the...

We analyze competitive credit markets with asymmetric information in which borrowers seek financing for either positive or negative net present value projects. The striking result is that there always exists an equilibrium where investment is efficient, while competitive lenders make strictly...

We develop a model of strategic grade determination by universities distinguished by their distributions of student academic abilities. Universities choose grading standards to maximize total wages of graduates. Job placement and wages hinge on a firm's productivity assessment given a student's...