This dissertation contains two essays on how contracting affects behavior and welfare of firms when information about some key variables is imperfect. The first essay deals with contractual solutions to the holdup problem when a party's relationship-specific investment can be subsidized by the...

We offer a general framework to study procurement auctions when quality matters. In this environment, sellers compete for a project by bidding a price-quality pair, and the winning bidder is determined by the score assigned to each bid. In contrast to the existing study in which only the...