Modeling Drought Option Contracts

Option Contracts in Supply Chains∗

This article investigates the pricing of options when the demand curve is downward sloping. Our speciÞc application arises in a supply chain setting, where a manufacturer offers the retailer the right to reorder items at a Þxed price and/or the right to return unsold goods for a predetermined salvage value. We show that the introduction of option contracts causes the wholesale price to increase...

Option Contracts and Vertical Foreclosure

A model of vertical integration is studied. Upstream firms sell differentiated inputs; downstream firms bundle them to make final products. Downstream products are sold as option contracts, which allow consumers to choose from a set of commodities at predetermined prices. The model is illustrated by examples in telecommunication and health markets. Equilibria of the integration game must result...

Option contracts for a privacy-aware market

Suppliers (including companies and individual prosumers) may wish to protect their private information when selling items they have in stock. A market is envisaged where private information can be protected through the use of differential privacy and option contracts, while privacy-aware suppliers deliver their stock at a reduced price. In such a marketplace a broker acts as intermediary betwee...

Using option-based contracts to improve health outcomes.

In this new scheme, entities may purchase individual insurance policies on separate medical products and services. We will explore how this may be implemented in clinical scenarios. Also, we will explore how this scheme may promote favorable clinical and economic outcomes. With this proposed scheme, instead of one insurance policy, an individual could select single policies on only those produc...

Supplier Competition with Option Contracts for Discrete Blocks of Capacity