Optimality of sequential screening with multiple units and ex post participation constraints

C-Tier
Journal: Economics Letters
Year: 2016
Volume: 142
Issue: C
Pages: 64-68

Authors (2)

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that in sequential screening problems with ex post participation constraints, optimal contracts elicit the agent’s pay-off irrelevant ex ante information when the principal and agent can trade multiple units, in contrast to when they can trade a single unit only. The difference arises because with multiple units, the principal can price each unit differently, giving rise to a larger number of screening instruments. Optimal contracts implement output schedules that are not monotone in the initial information. We identify regularity conditions which ensure that non-monotone schedules are incentive compatible.

Technical Details

RePEc Handle
repec:eee:ecolet:v:142:y:2016:i:c:p:64-68
Journal Field
General
Author Count
2
Added to Database
2026-01-29