This paper analyzes optimal procurement mechanisms in a setting where the procurement agency has incomplete information concerning the firms’ cost functions and cares about quality as well as price. Low type firms are cheaper than high type firms in providing low quality but more expensive...

We uniquely examine the relationship between firm-sponsored training and product quality competition. Using an oligopolistic model of both price and quality competition, we show that an increase in the sensitivity of demand to product quality will strengthen firms’ incentives to train their...

We extend the analysis carried out by Valletti (2000) by considering an environmental externality in a vertically differentiated duopoly where firms compete à la Cournot with fixed costs of quality improvement. We show that, if the weight of the external effect is high enough, the resulting...