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Lender learning and entry under general demand uncertainty

Jain, N. and Mirman, L. J. (2011). Lender learning and entry under general demand uncertainty. Review of Economic Design, 15(2), pp. 163-175. doi: 10.1007/s10058-011-0108-0

Abstract

In this paper, we examine the effect of potential entry on learning by a lender when the demand shock has a general distribution. We show that under this type of noise, entry does not lead to any changes in the equilibrium expected signals and therefore, there is no effect on learning by the lender, unlike the case when noise is uniformly distributed. The result holds even when contracts are not observable.

Publication Type: Article
Additional Information: The final publication is available at Springer via http://dx.doi.org/10.1007/s10058-011-0108-0
Publisher Keywords: Entry, Information, Learning, Contracts
Subjects: H Social Sciences > HB Economic Theory
Departments: School of Arts & Social Sciences > Economics
Related URLs:
URI: http://openaccess.city.ac.uk/id/eprint/5751
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