In online display advertising, the prevalent method advertisers employ to acquire impressions is to contract with an intermediary. These contracts involve upfront payments made by the advertisers to the intermediary, in exchange for running their campaigns on their behalf. This paper studies the optimal contract offered by the intermediary in a setting where advertisers’ budgets and targeting c...

Contract farming involves a pre-agreed price between the company and the farmer. The agreement is defined by the commitment of the farmer to provide an agricultural commodity of a certain type at a time and a price and the quantity required by a committed buyer, mostly a large company. The present paper is intended to conduct a case study of PEPSICO Plant, located in village Channo, district Sa...

Protection buyers share risk with protection sellers, whose assets are only imperfectly pledgeable because of moral hazard. To mitigate moral hazard, privately optimal contracts involve variation margins. When margins are called, protection sellers must sell some of their assets to other investors. We analyse, in a general equilibrium framework, whether this leads to ine¢ cient …re sales. If ma...

We show that loyalty discounts create an externality among buyers even without economies of scale or downstream competition, and whether or not buyers make any commitment. Each buyer who signs a loyalty discount contract softens competition and raises prices for all buyers. We prove that, provided the entrant’s cost advantage is not too large, with enough buyers, this externality implies that i...

Motivated by observations in the Norwegian airline industry in the late 90s, we develop a semicollusive model with collusion on gross prices and competition on contracts for large customers (corporate contracts). The theoretical predictions are tested on detailed data on gross prices, large customer prices and quantities in the Norwegian airline industry in the period 1998-2001. We control for ...

B2Bs are online markets where buyers and sellers trade products either in the spot market or via derivate instruments such as option contracts. Our goal in this paper is to show how procurement managers, in addition to buying on the spot market in cash (physical transactions), can integrate risk management tools (paper transactions) to mitigate risk over multiple time periods. Specifically, our...

We study competition and coordination in a supply chain in which a single supplier both operates a direct channel and sells its product through multiple differentiated retailers competing in quantities. We study analytically the supply chain with symmetric retailers and find that the supplier generally prefers to have as many retailers as possible in the market, even if the retailers’ equilibri...

A partial equilibrium model of stochastic crop production is used to analyze the impacts of subsidized crop insurance on the extensive margin of agricultural production. It is shown that land use is unchanged only when an actuarially fair, perfectly separating insurance contract is offered. For actuarially fair, pooling equilibrium contracts, however, land with a minimum quality that is strictl...

Based on the critical assumption of strategic complementarity, this paper builds a general model to describe and solve the screening problem faced by the monopolist seller of a network good. By applying monotone comparative static tools, we demonstrate that the joint presence of asymmetric information and positive network effects leads to a strict downward distortion for all consumers in the qu...

Channel rebates and returns policies are common mechanisms for manufacturers to entice retailers to increase their order quantities and sales ultimately. However, when the underlying demand depends on the retail price, it has been known that channel coordination cannot be achieved if only one of these mechanisms is deployed. In this paper, we show that a policy that combines the use of wholesal...