search query: @author Baiman, S. / total: 15
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| Author: | Baiman, S. Fischer, P. Rajan, M. |
| Title: | Information, contracting, and quality costs |
| Journal: | Management Science
2000 : JUN, VOL. 46:6, p. 776-789 |
| Index terms: | INFORMATION INCENTIVES QUALITY |
| Language: | eng |
| Abstract: | This article analyzes the relation between product quality, the cost of quality, and the information that can be contracted upon. The authors consider a setting where a risk neutral supplier sells an intermediate product to a risk neutral buyer. The supplier incurs prevention costs to reduce the probability of selling a defective product, and the buyer incurs appraisal costs to identify defects. Both decisions are subject to moral hazard. |
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