This article examines how the threat of entry constrains pricing behavior in a natural monopoly with briefly sunk costs. In the model of dynamic price competition explored here, costs are too briefly sunk to confer any strategic advantage to incumbency. Despite the lack of advantage to...

As the recent financial crisis unfolded, a new financial instrument—contingent convertible (coco) bonds—was widely considered as a mechanism for promptly recapitalizing overlevered financial institutions. Essentially, the conversion feature of coco bonds would replace supervisory discretion...

Many corporate finance researchers have avoided analyzing financial institutions, perhaps on the grounds that they are “unique” or “different” from other types of firms. This assessment reflects some unusual features of financial firms' liabilities and a set of governmental regulatory...