On the Ratchet Effect with Product Market Competition
研究两期行业中，代理人拥有私人成本信息且委托人只能使用现货合同时，棘轮效应如何影响行业动态和企业绩效，发现竞争环境下逆向选择导致的低效率可能持续存在。
ABSTRACT We study a two‐period industry where firms are run by agents privately informed about their (persistent) costs, and principals can only use spot contracts. We characterize novel semi‐separating equilibria where principals randomize in one or both periods. These equilibria have the following implications for industry dynamics and firms' performance. First, despite some principals learning their agents' type early on, aggregate output need not increase over time: the inefficiencies generated by the adverse selection problem can be persistent over time in competitive environments. Second, a more severe adverse selection problem may result in higher market prices, thereby increasing principals' profits.