This paper develops and analyzes a principal-agent model for product specification and production motivated by Ücore buyingÝ decisions at an automobile manufacturer. The model focuses on two important elements of the ÜcoreÝ buyer's responsibility: (1) assessing the supplier's capability, and...

Recent legislations directed Medicare to revamp its decades-old system for reimbursing dialysis treatments, with focus on the risk adjustment of payments and on the transition toward a pay-for-compliance system. To design an optimal payment system that incorporates these features, we develop an...