This paper argues that the strategic use of debt favours the revelation of information in dynamic adverse selection … problems. Our argument is based on the idea that debt is a credible commitment to end long term relationships. Consequently …, debt encourages a privately informed party to disclose its information at early stages of a relationship. We illustrate our …

their informational advantage in the future. We point out that the strategic use of debt by an uninformed party induces … that (renegotiable) debt is a credible commitment to end the long-term relationship if information is not revealed. We show … that the strategic advantage of debt increases with good durability and we briefly address the financing decision of a …

magnitude of concessions being made, either on a bilateral or trilateral basis. Debt is shown to undermine the firm's ability to …