This paper studies the relationship between competition and incentives in an economy with financial contracts. We concentrate on non-exclusive credit relationships, those where an entrepreneur can simultaneously accept more than one contractual offer. Several homogeneous lenders compete on the...

This paper examines the role of direct mechanisms in common agency games. We focus on pure strategies and deterministic contracts and show how the introduction of a separability condition on the preferences of the agent is sufficient for the Revelation Principle to hold in in this setting, when...

This paper suggests the existence of a relationship between business cycle fluctuations and firms' capital structure. The presence of asymmetric information in the loan market is responsible for endogenous fluctuations to take place at equilibrium. We depart from the more traditional endogenous...

We show that a necessary and sufficient condition for entry to be unprofitable in markets with adverse selection is that that no buyer type be willing to trade at a price above the expected unit cost of serving those types who are weakly more eager to trade than her. We provide two applications...

We study competing mechanism games in which principals simultaneously design contracts to deal with several agents. We show that principals can profit from privately communicating with agents by generating incomplete information in the continuation game they play. Specifically, we construct an...

We study resource allocation under private information when the planner cannot prevent bilateral side trading between consumers and firms. Adverse selection and side trading severely restrict feasible trades, as each marginal quantity must be fairly priced given the consumer types who purchase...

Many financial markets rely on a discriminatory limit-order book to balance supply and demand. We study these markets in a static model in which uninformed market makers compete in nonlinear tariffs to trade with an informed insider, as in Glosten (1994), Biais, Martimort, and Rochet (2000), and...