Essays on entry, exclusion, and litigation finance

This thesis comprises two parts. Part I examines third-party litigation funding. A critical review and a formal model with costly pre-trial investigation reveal a core trade-off: by relaxing claimants’ financing and insurance constraints, funding can expand access to justice, but contract design and information frictions can also raise the incidence of weak claims. The model characterizes when each force dominates and derives implications for funding terms and policy. Part II studies exclusionary conduct. A comment on Fumagalli–Motta (2008) revisits buyers’ miscoordination and downstream competition, identifying a mechanism through which an incumbent can sustain exclusion as a unique equilibrium. The next paper develops a framework in which scale-driven network effects among buyers activate the same mechanism even without buyer pre-commitment; simple pricing schemes can therefore sustain exclusion despite standard “Chicago” remedies. The final paper shows how conditional rebates can foreclose an entrant that must reach scale when capital markets are imperfect. Because buyers risk unmet demand or costly top-ups if others do not switch, each buyer’s best response is to stay, sustaining exclusion. With downstream competition, exclusion can also arise via “strategic chilling” that softens competition. The results yield testable predictions and inform the assessment of rebate schemes when financial frictions limit entrants’ ability to commit.