Optimal contracts under endogenous demand information acquisition. (English) Zbl 1476.91075
Summary: We consider a supplier selling to a retailer who decides whether or not to exert a fixed cost to acquire private demand information. We show that quantity discounts, established by the extant literature to be the optimal response for exogenous information acquisition, are also optimal under the setting with endogenous information acquisition.
MSC:
| 91B41 | Contract theory (moral hazard, adverse selection) |
| 90B06 | Transportation, logistics and supply chain management |
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