We study an original equipment manufacturer (OEM) purchasing two inputs for assembly from two suppliers with private cost information. The OEM can contract with the two suppliers either simultaneously or sequentially. We consider both cases in which the OEM has relatively equal bargaining power...

In this paper, we study a conditional upgrade strategy that has recently emerged in the travel industry. After a consumer makes a reservation for a product (e.g., a hotel room), she is asked whether she would like to upgrade her product to a higher-quality (more expensive) one at a discounted...

This paper studies the effect of introducing a vertical differentiation strategy through sales of upgrades to a new type of premium product on the firm's price dispersion arising from its use of price discrimination for the base product. As a relevant application, we examine, both analytically...