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From Bottom of the Barrel to Cream of the Crop: Sequential Screening With Positive Selection

Author

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  • Jean Tirole

Abstract

In a number of interesting environments, dynamic screening involves positive selection: in contrast with Coasian dynamics, only the most motivated remain over time. The paper provides conditions under which the principal's commitment optimum is time consistent and uses this result to derive testable predictions under permanent or transient shocks. It also identifies environments in which time consistency does not hold despite positive selection, and yet simple equilibrium characterizations can be obtained.

Suggested Citation

  • Jean Tirole, 2016. "From Bottom of the Barrel to Cream of the Crop: Sequential Screening With Positive Selection," Econometrica, Econometric Society, vol. 84, pages 1291-1343, July.
    • Handle: RePEc:wly:emetrp:v:84:y:2016:i::p:1291-1343
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    Cited by:

    1. Mohamed Saleh & Jean Tirole, 2021. "Taxing Identity: Theory and Evidence From Early Islam," Econometrica, Econometric Society, vol. 89(4), pages 1881-1919, July.
    2. Stefan Buehler & Nicolas Eschenbaum & Severin Lenhard, 2021. "Dynamic Monopoly Pricing With Multiple Varieties: Trading Up," Papers 2108.07146, arXiv.org, revised Jul 2025.
    3. Beccuti, Juan & Möller, Marc, 2021. "Screening by mode of trade," Games and Economic Behavior, Elsevier, vol. 129(C), pages 400-420.
    4. Günnewig, Maximilian & Georgiadis-Harris, Alkis & Mitkov, Yuliyan, 2024. "Smart Banks," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302331, Verein für Socialpolitik / German Economic Association.
    5. Fugger, Nicolas & Gretschko, Vitali & Pollrich, Martin, 2022. "Information design in sequential procurement," Games and Economic Behavior, Elsevier, vol. 135(C), pages 79-85.
    6. Fugger, Nicolas & Gretschko, Vitali & Pollrich, Martin, 2019. "Sequential procurement with limited commitment," ZEW Discussion Papers 19-030, ZEW - Leibniz Centre for European Economic Research.
    7. Jean Tirole, 2016. "From Bottom of the Barrel to Cream of the Crop: Sequential Screening With Positive Selection," Econometrica, Econometric Society, vol. 84, pages 1291-1343, July.
    8. Alkis Georgiadis-Harris & Maxi Guennewig & Yuliyan Mitkov, 2024. "Smart Banks," CRC TR 224 Discussion Paper Series crctr224_2024_540, University of Bonn and University of Mannheim, Germany.
    9. Rick Antle & Peter Bogetoft, 2019. "Mix Stickiness Under Asymmetric Cost Information," Management Science, INFORMS, vol. 67(6), pages 2787-2812, June.
    10. Brzustowski, Thomas & Georgiadis Harris, Alkis & Szentes, Balázs, 2023. "Smart contracts and the Coase conjecture," LSE Research Online Documents on Economics 117950, London School of Economics and Political Science, LSE Library.
    11. Buehler, Stefan & Nicolas Eschenbaum, 2018. "Explaining Escalating Fines and Prices: The Curse of Positive Selection," Economics Working Paper Series 1807, University of St. Gallen, School of Economics and Political Science.
    12. Zihao Li & Jonathan Libgober & Xiaosheng Mu, 2022. "Sequentially Optimal Pricing under Informational Robustness," Papers 2202.04616, arXiv.org, revised Sep 2025.
    13. László Csorba, 2019. "Issues and Types of Adverse Selection and Negative Selection," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(2), pages 87-116.
    14. S. Nageeb Ali & Navin Kartik & Andreas Kleiner, 2023. "Sequential Veto Bargaining With Incomplete Information," Econometrica, Econometric Society, vol. 91(4), pages 1527-1562, July.
    15. Rick Antle & Peter Bogetoft, 2018. "Procurement with Asymmetric Information About Fixed and Variable Costs," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 56(5), pages 1417-1452, December.
    16. Enache, Andreea & Florens, Jean-Pierre, 2024. "Quantile analysis of “hazard-rate” game models," Journal of Econometrics, Elsevier, vol. 238(2).
    17. Vitali Gretschko & Martin Pollrich, 2022. "Incomplete Contracts in Multi-period Procurement," Management Science, INFORMS, vol. 68(7), pages 5146-5161, July.
    18. Tangerås, Thomas & Gick, Wolfgang, 2021. "Contracting with Endogenously Incomplete Commitment: Escape Clauses," Working Paper Series 1390, Research Institute of Industrial Economics.
    19. Buehler, Stefan & Eschenbaum, Nicolas, 2020. "Explaining escalating prices and fines: A unified approach," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 153-164.
    20. Suresh P. Sethi & Sushil Gupta & Vipin K. Agrawal & Vijay K. Agrawal, 2022. "Nobel laureates’ contributions to and impacts on operations management," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4283-4303, December.
    21. Dongkyu Chang & Duk Gyoo Kim & Wooyoung Lim, 2022. "Positive and Negative Selection in Bargaining: An Experiment," CESifo Working Paper Series 9908, CESifo.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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