We show that competing firms relax overall competition by lowering future barriers to entry.We illustrate our findings in a two-period model with adverse selection where banks strategically commit to disclose borrower information.By doing this, they invite rivals to enter their market.Disclosure of borrower information increases an entrant's second-period profits.This dampens competition for serving the first-period market.
|Place of Publication||Tilburg|
|Number of pages||32|
|Publication status||Published - 2002|
|Name||CentER Discussion Paper|
- access to market