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Screening for Choice Sets

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Listed:
  • Tan Gan
  • Yingkai Li

Abstract

We study a screening problem in which an agent privately observes a set of feasible technologies and can strategically disclose only a subset to the principal. The principal then takes an action whose payoff consequences for both players are publicly known. Under the assumption that the possible technology sets are ordered by set inclusion, we show that the optimal mechanism promises the agent a utility that is weakly increasing as the reported set expands, and the choice of the principal maximizes her own utility subject to this promised utility constraint. Moreover, the optimal promised utility either coincides with the agent's utility under the complete information benchmark or remains locally constant, with the number of constant segments bounded by the number of downward-sloping segments of the complete information benchmark.

Suggested Citation

  • Tan Gan & Yingkai Li, 2026. "Screening for Choice Sets," Papers 2601.15580, arXiv.org.
    • Handle: RePEc:arx:papers:2601.15580
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    File URL: http://arxiv.org/pdf/2601.15580
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