Vertical Contracting with Informational Opportunism

@article{Dequiedt2015VerticalCW,
  title={Vertical Contracting with Informational Opportunism},
  author={Vianney Dequiedt and D. Martimort},
  journal={The American Economic Review},
  year={2015},
  volume={105},
  pages={2141-2182}
}
We consider vertical contracting arrangements between a manufacturer and a retailing network when retailers have private information and the organization is run through bilateral contracts. We highlight a new form of informational opportunism arising when the manufacturer manipulates information learned separately in each relationship. We characterize the set of allocations robust to such opportunism by means of simple ex post incentive compatibility constraints. Those constraints limit the… Expand
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