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Ex post information rents in sequential screening

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  • Daniel Krähmer
  • Roland Strausz
  • Melanie

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 & Melanie, 2014. "Ex post information rents in sequential screening," SFB 649 Discussion Papers SFB649DP2014-046, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    • Handle: RePEc:hum:wpaper:sfb649dp2014-046
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    References listed on IDEAS

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    Cited by:

    1. Bergemann, Dirk & Strack, Philipp, 2022. "Progressive participation," Theoretical Economics, Econometric Society, vol. 17(3), July.
    2. Asseyer, Andreas, 2018. "Optimal monitoring in dynamic procurement contracts," International Journal of Industrial Organization, Elsevier, vol. 59(C), pages 222-252.
    3. Hao Li & Xianwen Shi, 2017. "Discriminatory Information Disclosure," American Economic Review, American Economic Association, vol. 107(11), pages 3363-3385, November.
    4. Lu, Jingfeng & Wang, Zijia, 2021. "Optimal selling mechanisms with buyer price search," Journal of Economic Theory, Elsevier, vol. 196(C).
    5. 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).
    6. Lu, Jingfeng & Parreiras, Sérgio O., 2017. "Monotone equilibrium of two-bidder all-pay auctions Redux," Games and Economic Behavior, Elsevier, vol. 104(C), pages 78-91.
    7. Yu, Pei Cheng, 2020. "Seemingly exploitative contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 299-320.
    8. Krähmer, Daniel, 2020. "Information disclosure and full surplus extraction in mechanism design," Journal of Economic Theory, Elsevier, vol. 187(C).
    9. Krähmer, Daniel & Kováč, Eugen, 2016. "Optimal sequential delegation," Journal of Economic Theory, Elsevier, vol. 163(C), pages 849-888.
    10. Eső, Péter & Szentes, Balázs, 2017. "Dynamic contracting: an irrelevance theorem," Theoretical Economics, Econometric Society, vol. 12(1), January.
    11. Daozhi Zhao & Mingyang Chen, 2019. "Ex-ante versus ex-post destination information model for on-demand service ride-sharing platform," Annals of Operations Research, Springer, vol. 279(1), pages 301-341, August.
    12. Zhu, Shuguang, 2023. "Private disclosure with multiple agents," Journal of Economic Theory, Elsevier, vol. 212(C).
    13. Mettral, Thomas, 2018. "Deterministic versus Stochastic Contracts in a Dynamic Principal-Agent Model," Rationality and Competition Discussion Paper Series 93, CRC TRR 190 Rationality and Competition.
    14. Krähmer, Daniel & Strausz, Roland, 2017. "Sequential versus static screening: An equivalence result," Games and Economic Behavior, Elsevier, vol. 106(C), pages 317-328.
    15. Yamashita, Takuro & Zhu, Shuguang, 2021. "Type-contingent Information Disclosure," TSE Working Papers 21-1242, Toulouse School of Economics (TSE).
    16. Liu, Bin & Liu, Dongri & Lu, Jingfeng, 2020. "Shifting supports in Esö and Szentes (2007)," Economics Letters, Elsevier, vol. 193(C).
    17. 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.
    18. Andreas Asseyer, "undated". "Optimal monitoring in dynamic procurement contracts," BDPEMS Working Papers 2015002, Berlin School of Economics.
    19. Huiyi Guo & Wei He & Bin Liu, 2022. "Learning by Consuming: Optimal Pricing with Endogenous Information Provision," Papers 2209.01453, arXiv.org.
    20. Boaz Zik, 2023. "Efficient sequential screening with informational externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(2), pages 567-590, February.
    21. Ilan Lobel & Wenqiang Xiao, 2017. "Technical Note—Optimal Long-Term Supply Contracts with Asymmetric Demand Information," Operations Research, INFORMS, vol. 65(5), pages 1275-1284, October.
    22. Herbst, Holger, 2015. "Pricing Heterogeneous Goods under Ex Post Private Information," Bonn Econ Discussion Papers 01/2015, University of Bonn, Bonn Graduate School of Economics (BGSE).
    23. Thomas Mettral, 2018. "Deterministic versus stochastic contracts in a dynamic principal-agent model," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(2), pages 209-218, October.
    24. 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.

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    More about this item

    Keywords

    information rents; sequential screening; information disclosure;
    All these keywords.

    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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