Intra-industry debt and tacit collusion

dc.contributor.author	Colonescu, Constantin
dc.date.accessioned	2016-03-30
dc.date.accessioned	2022-05-27T01:15:32Z
dc.date.available	2022-05-27T01:15:32Z
dc.date.issued	2014
dc.description.abstract	This paper shows that a firm competes less vigorously when it holds debt issued by another, competing firm. Reciprocal holding of debt by two firms may signal a credible commitment to collusion between the firms. This result is robust to a dynamic game setting, where reciprocal holding of debt is shown to reduce the firms’ incentives to deviate from collusion. The message conveyed by these results is that intra-industry debt should raise concerns about tacit collusion. The results of this study are particularly relevant in the banking sector, where holding reciprocal debt is the norm, rather than the exception.
dc.format.extent	127.71 KB
dc.format.mimetype	PDF
dc.identifier.citation	Colonescu, C. (2014). Intra-industry debt and tacit collusion. Journal of Finance and Bank Management, 2(2), 71-85. Retrieved from http://jfbmnet.com
dc.identifier.uri	https://hdl.handle.net/20.500.14078/564
dc.language	English
dc.language.iso	en
dc.rights	All Rights Reserved
dc.subject	intra-industry debt
dc.subject	interbank lending
dc.subject	microeconomics of banking
dc.title	Intra-industry debt and tacit collusion	en
dc.type	Article
dspace.entity.type

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