We study how financial intermediation affects real market variables when an incumbent firm is threatened by entry to its market and must contract with a bank for outside funds. Contracts between the bank and the monopolist are short-term and redesigned after the entry decision of a second firm...

In this paper, we study the effect of combining two forms of economic interactions, namely a contractual relationship and a game, systematically. We compare several models with different market structures involving Cournot competition between firms in which at least one of the firms is in an...

We study how the threat of entry affects financial contracting between an incumbent firm and a bank, in a stochastic and dynamic environment. Contracts are short term and public. We determine the effects of the first period financial contract on the first period outputs in face of the threat of...