We present an analysis of competition under asymmetric information where prices react asymmetrically to changes in firms' marginal costs. When one firm has private information about some customers, an increase in an uninformed firm's marginal cost leads to a price increase, as usual. However, an...

We examine how the informational structure of loan markets interacts with banks' strategic behavior in determining lending standards, lending volume, and the aggregate allocation of credit. We show that, as banks obtain private information about borrowers and information asymmetries across banks...

Just a few years ago, Wall Street was rocked by scandals about conflicts of interest involving stock analysts' reports. In response, the U.S. Securities and Exchange Commission (SEC) undertook investigations and filed a number of complaints against some major securities firms and analysts. These...