Why are higher quality niches seen as intrinisically more profitable in business circles? Why do high quality products sometimes have a low real price, while it is unusual to see low quality products with high real prices? Can markets have quality differentiation as well as quality bunching? How...

This paper studies competition between a small number of suppliers and a single buyer (or an auction with a small number of bidders and a single seller), when total demand (supply) is uncertain. It is well known that when a small number of suppliers compete in supply functions the service is not...

Why are higher quality niches seen as intrinsically more profitable in business circles? Why do high quality products sometimes have a low real price, while it is unusual to see low quality products with high real prices? Can markets have quality differentiation as well as quality bunching? In...

We develop a new model of quality to capture the idea that even if a customer chooses to purchase a product, it may fail to deliver.' In this event, the customer may wish to choose some other product. We model this as a two stage game where firms first choose quality and then price. We find that...

This paper studies competition between a small number of suppliers and a single buyer, (or an auction with a small number of bidders and a single seller) when total demand (supply) is uncertain. It is well known that when a small number of suppliers compete in supply functions the service is not...

We apply a Bernheim-Whinston (1986) type mechanism to a situation where a single buyer with uncertain demand wishes to buy from a small number of suppliers. We let suppliers bid a payment contingent on own quantity supplied, and another payment contingent on the realization of total demand. We...

This paper studies situations where a single buyer with uncertain demand wishes to buy from a small number of suppliers. In this setting it is well understood that supply function bidding results in the product not being produced at the lowest cost, that is, in the loss of production efficiency....