International Journal of Business and Economics Volume 5, No. 3 December, 2006

Financial Predation by the "Weak"

Spiros Bougheas

School of Economics, University of Nottingham, U.K.

Saksit Thananittayaudom

Faculty of Economics, Chulalongkorn University, Thailand

Abstract

We consider a Stackelberg game, where a financially constrained leader competes with a "deep pocket" follower, and analyze the trade-off between a financial and a strategic advantage for both the design of financial contracts and market structure.

Keywords：predation, financial contracts, Stackelberg game.

JEL Classifications：G32, G43.

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