This paper derives a model of screening contracts in the presence of positive
network effects when building an electronic commerce network (e-commerce)
between a large firm and a small and medium sized enterprise (SME) supplier
based on Compte (2008). Compte (2008) main insight is that when several
potential candidates compete for the task, the principal will in general
improve the performance of his firm by inducing the member candidates to assess
their competence before signing the contract (through an appropriate choice of
contracts).