Double Bertrand Competition among Intermediaries when Consumers can Default.

This paper models a sequential double price competition among intermediaries when their expected revenue per sale is affected by consumers ' default. If this revenue is non-monotonic with the asking price, the Walrasian outcome may not be an equilibrium and demand rationing may emerge instead. I would like to thank an anonymous referee for helpful comments that have improved the paper. I would also like to thank Paul Reding, Tim Worrall and colleagues at Keele University for useful discussions