Spatial competition among financial service providers and optimal contract design

We present a contract-based model of industrial organization that allows us to consider in unfiied way both different information frictions (moral hazard, adverse selection) and a variety of market structures (monopoly, perfect and imperfect competition, strategic interaction). We show how this method can be applied to banking and insurance industries. Transitions from extractive local monopoly organizations to globally competitive inclusive environments are discussed alongside with frictions aecting the outcome of such transitions.