This paper analyzes costly favoritism related to physical attractiveness and gender in bank loan markets using a market structure-based method. The rationale is that a concentrated market provides more space for loan officers to discriminate against a certain group of borrowers. Using several...

Financially constrained firms hold more inventory than do financially unconstrained firms and also show more volatility in inventory holdings. To understand why, we model the interaction of financial constraints, capacity constraints, and the response of production and inventory to cost and...