Article ID Journal Published Year Pages File Type
5062834 Economics Letters 2006 6 Pages PDF
Abstract
Even if firm type is publicly known, relationship intermediaries obtain an informational rent, formalized as a compound quasi-option sequence, when each rollover decision is conditioned on a private signal of next-period success. The relative performance of this signal extraction apparatus forms a natural measure of relationship 'closeness'.
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Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Informational rent, publicly known firm type, and 'closeness' in relationship finance
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