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This paper analyzes the implications of contractual innovation in vertically-separated industries, using the example of the video rental industry. Prior to 1998, video stores obtained inventory from movie distributors using simple linear pricing contracts. In 1998, revenue-sharing contracts were widely adopted. I investigate the effect of using revenue-sharing contracts on firms’ profits and co...
Monitoring the reliability of products in both the manufacturing and service processes is of main concern in today’s competitive market. To this end, statistical process control has been widely used to control the reliability-related quality variables. The so-far surveillance schemes have addressed processes with independent quality characteristics. In multistage processes, however, the cascade...
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