Ex Post Private Information and Monopolistic Screening
AbstractThis paper investigates how additional ex post private information by the agent affects the equilibrium outcome of the monopolistic screening model. In general, the principal always weakly benefits when the agent receives additional private information after the contracting stage. Instead, both the agent's equilibrium payoffs and allocative efficiency may, due to the principal's concerns about information rents, increase or decrease. Moreover, we obtain the result that optimal contracts may involve lying offtheequilibrium path and show that this exacerbates bunching in the monopolistic screening problem.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.
Volume (Year): 8 (2008)
Issue (Month): 1 (October)
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Web page: http://www.degruyter.com
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- Krähmer, Daniel & Strausz, Roland, 2011.
"The Benefits of Sequential Screening,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
363, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Krähmer, Daniel & Strausz, Roland, 2010. "Optimal Procurement Contracts with Preâ€“Project Planning," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 303, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Kovác, Eugen & Krähmer, Daniel, 2013. "Optimal Sequential Delegation," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 427, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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