Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85803
Authors: 
Jain, Neelam
Jeitschko, Thomas D.
Mirman, Leonard J.
Year of Publication: 
2001
Series/Report no.: 
Tinbergen Institute Discussion Paper 01-037/2
Abstract: 
In this paper, we analyze the interaction between an incumbent firm's financial contract with abank and its product market decisions in the face of the threat of entry, in a dynamic model.The main results of the paper are: there exists a separating equilibrium with no limit pricing; thelow-cost incumbent repays more to the bank in the first period, due to the threat of entry; andthere are parameter values for which the bank makes more profits with the threat of entry thanwithout.
Subjects: 
Entry
Intermediation
Limit Pricing
Banking
information
Document Type: 
Working Paper

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