The paper investigates a model where two parties A and B invest sequentially in a joint project (an asset). Investments and the asset value are nonverifiable, and A is wealth constrained so that an initial outlay must be financed by either agent B or an external investor C (a bank). We show that...

Human capital theory distinguishes between training in general-usage and firm-specific skills. In his seminal work, Becker (1964) argues that employers will not be willing to invest in general training when labor markets are competitive. However, they are willing to invest in specific training...