Lender learning and entry under general demand uncertainty
Tóm tắt
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.
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