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Anti-Competitive Financial Contracting: the Design of Financial Claims

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Listed:
  • Cestone, G.
  • White, L.

Abstract

In this paper we show that the "Coase problem" of the private oversupply of inputs applies equally to investors supplying capital to firms. Investors would like to commit to supplying only the monopoly amount of capital to an industry, but ex-post may be tempted to fund a second firm, devaluing the investment of the first entrepreneur.

Suggested Citation

  • Cestone, G. & White, L., 1999. "Anti-Competitive Financial Contracting: the Design of Financial Claims," Papers 99.525, Toulouse - GREMAQ.
  • Handle: RePEc:fth:gremaq:99.525
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    More about this item

    Keywords

    CAPITAL ; COMPETITION ; BUSINESS FINANCING;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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