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Ex post information rents in sequential screening

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  • Krähmer, Daniel
  • Strausz, Roland

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

  • Krähmer, Daniel & Strausz, Roland, 2014. "Ex post information rents in sequential screening," SFB 649 Discussion Papers 2014-046, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2014-046
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    References listed on IDEAS

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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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