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Ex Post Information Rents in Sequential Screening

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  • Daniel Krähmer
  • Roland Strausz

Abstract

We study ex post information rents in sequential screening models where the agent receives private ex ante and ex post information. The principal has to pay ex post information rents for preventing the agent to coordinate lies about his ex ante and ex post information. When the agent’s ex ante information is discrete, these rents are positive, whereas they are zero in continuous models. Consequently, full disclosure of ex post information is generally suboptimal. Optimal disclosure rules trade off the benefits from adapting the allocation to better information against the effect that more information aggravates truth-telling.

Suggested Citation

  • Daniel Krähmer & Roland Strausz, 2014. "Ex Post Information Rents in Sequential Screening," CESifo Working Paper Series 4739, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4739
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    References listed on IDEAS

    as
    1. Hao Li & Xianwen Shi, 2013. "Discriminatory Information Disclosure," Working Papers tecipa-497, University of Toronto, Department of Economics.
    2. Pascal Courty & Li Hao, 2000. "Sequential Screening," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 697-717.
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    5. Bergemann, Dirk & Wambach, Achim, 2015. "Sequential information disclosure in auctions," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 1074-1095.
    6. Alessandro Pavan, 2007. "Long-Term Contracting in a Changing World," Discussion Papers 1456, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Baron, David P & Myerson, Roger B, 1982. "Regulating a Monopolist with Unknown Costs," Econometrica, Econometric Society, vol. 50(4), pages 911-930, July.
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    9. Nocke, Volker & Peitz, Martin & Rosar, Frank, 2011. "Advance-purchase discounts as a price discrimination device," Journal of Economic Theory, Elsevier, vol. 146(1), pages 141-162, January.
    10. Marco Battaglini, 2005. "Long-Term Contracting with Markovian Consumers," American Economic Review, American Economic Association, vol. 95(3), pages 637-658, June.
    11. Péter Eső & Balázs Szentes, 2007. "The price of advice," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 863-880, December.
    12. Daniel Krähmer & Roland Strausz, 2011. "Optimal Procurement Contracts with Pre-Project Planning," Review of Economic Studies, Oxford University Press, vol. 78(3), pages 1015-1041.
    13. Alessandro Pavan & Ilya Segal & Juuso Toikka, 2014. "Dynamic Mechanism Design: A Myersonian Approach," Econometrica, Econometric Society, vol. 82(2), pages 601-653, March.
    14. Raphael Boleslavsky & Maher Said, 2013. "Progressive Screening: Long-Term Contracting with a Privately Known Stochastic Process," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 1-34.
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    Citations

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    Cited by:

    1. Hao Li & Xianwen Shi, 2013. "Discriminatory Information Disclosure," Working Papers tecipa-497, University of Toronto, Department of Economics.
    2. Arimoto, Yutaka & Kono, Hisaki & Ralandison, Tsilavo & Sakurai, Takeshi & Takahashi, Kazushi, 2015. "Understanding traders' regional arbitage : the case of rice traders in Antananarivo, Madagascar," IDE Discussion Papers 505, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. repec:eee:gamebe:v:104:y:2017:i:c:p:78-91 is not listed on IDEAS
    4. Krähmer, Daniel & Kováč, Eugen, 2016. "Optimal sequential delegation," Journal of Economic Theory, Elsevier, vol. 163(C), pages 849-888.
    5. Szentes, Balázs & Eső, Péter, 2017. "Dynamic contracting: an irrelevance theorem," Theoretical Economics, Econometric Society, vol. 12(1), January.
    6. Krähmer, Daniel & Strausz, Roland, 2017. "Sequential versus static screening: An equivalence result," Games and Economic Behavior, Elsevier, vol. 106(C), pages 317-328.
    7. Dirk Bergemann & Alessandro Bonatti & Alex Smolin, 2018. "The Design and Price of Information," American Economic Review, American Economic Association, vol. 108(1), pages 1-48, January.
    8. Andreas Asseyer, 2015. "Optimal monitoring in dynamic procurement contracts," Working Papers 2015002, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
    9. Raluca Iorgulescu, 2015. "Human Capital, The Digital Divide, And The Possible Connection To The Flow-Fund Analysis Of Socioeconomic Metabolism," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 5-16, January.

    More about this item

    Keywords

    information rents; sequential screening; information disclosure;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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