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Positive Profits in Competitive Credit Markets With Adverse Selection

Bernhardt, Dan - 2020

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...

Persistent link: https://www.econbiz.de/10012834214

Efficient Price Competition in Markets with Adverse Selection

Dosis, Anastasios - 2020

This paper studies general markets with adverse selection in which symmetric firms supply (potentially multiple) products to privately-informed consumers and compete with price schedules. I show that a basic price cap regulation, in which the price caps are endogenously determined by firms,...

Persistent link: https://www.econbiz.de/10012837378

Negative Externalities and Equilibrium Existence in Competitive Markets with Adverse Selection

von Siemens, Ferdinand - 2009

on existing theories of competition in markets with adverse selection …

Persistent link: https://www.econbiz.de/10012763924

Competition and Price Transparency in the Market for Lemons : Experimental Evidence

Bochet, Olivier - 2020

design an experiment to examine the impact of competition and price transparency in such settings. Consistent with the … theoretical predictions, we find that competition promotes efficiency if bargainers cannot observe each other's price offers …. Contrary to the predictions, however, the efficiency-enhancing effect of competition persists even when offers are observable …

Persistent link: https://www.econbiz.de/10012854487

Competition between for-profit and non-profit firms : incentives, workers' self-selection, and wage differentials

Barigozzi, Francesca; Burani, Nadia - 2016

We study optimal non-linear contracts offered by two firms competing for the exclusive services of workers, who are privately informed about their ability and motivation. Firms differ in their organizational form, and motivated workers are keen to be hired by the non-profit firm because they...

Persistent link: https://www.econbiz.de/10011703431

Nonexclusive competition under adverse selection

Attar, Andrea; Mariotti, Thomas; Salanié, François - In: Theoretical economics : TE ; an open access journal in … 9 (2014) 1, pp. 1-40

A seller of a divisible good faces several identical buyers. The quality of the good may be low or high, and is the seller's private information. The seller has strictly convex preferences that satisfy a single-crossing property. Buyers compete by posting menus of nonexclusive contracts, so that...

Persistent link: https://www.econbiz.de/10011684967

Fighting for the best, losing with the rest : the perils of competition in entrepreneurial finance

Hernández, Juan; Wills, Daniel - 2024

giving more to all entrepreneurs. In equilibrium, competition for the best entrepreneurs forces intermediaries to offer …. Competition among financial intermediaries always forces them to fund projects with negative expected returns both from a private … scale. The three main features of our framework (competition, adverse selection, and limited liability) are necessary to get …

Persistent link: https://www.econbiz.de/10014537358

Non-Exclusive Competition in the Market for Lemons

Attar, Andrea; Mariotti, Thomas; Salanié, François - 2009

We consider an exchange economy in which a seller can trade an endowment of a divisible good whose quality she privately knows. Buyers compete in menus of non-exclusive contracts, so that the seller may choose to trade with several buyers. In this context, we show that an equilibrium always...

Persistent link: https://www.econbiz.de/10014199733

Does Competitive Pricing Cause Market Breakdown under Extreme Adverse Selection?

Mailath, George J.; Nöldeke, Georg - 2007

We study market breakdown in a finance context under extreme adverse selection with and without competitive pricing. Adverse selection is extreme if for any price there are informed agent types with whom uninformed agents prefer not to trade. Market breakdown occurs when no trade is the only...

Persistent link: https://www.econbiz.de/10014225111

Non-Exclusive Competition Under Adverse Selection

Attar, Andrea - 2011

. Buyers compete by posting arbitrary menus of contracts. Competition is non-exclusive in that the seller can simultaneously …

Persistent link: https://www.econbiz.de/10013127485