The article explores how supply chain contracts between manufacturers and retailers can affect competition when the terms of the contracts are not known to rival retailers. By using game theory, the researchers found that when contract terms are unobservable, wholesale price contracts can benefit manufacturers more than two-part tariff contracts. This can lead to higher industry profits and sheds light on why wholesale price contracts are popular. The study also provides new insights into buyback contracts and downstream mergers in the context of unobservable contracts.