Performance-based contracts (PBC) have become ubiquitous in industries ranging from aerospace and defense to computer support services. Despite advantages of paying for performance under PBC that have been highlighted in many previous studies, the more traditional Transaction-based Contracts...

In this paper, a spatial price equilibrium model with information asymmetry in quality is developed. Producers at the supply markets are aware of the quality of their products, whereas consumers, located at the demand markets, are aware only of the average quality of the products that are...