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dc.contributor.authorGalperti, Simoneen_US
dc.date.accessioned2011-03-08en_US
dc.date.accessioned2012-07-12T12:34:03Z-
dc.date.available2012-07-12T12:34:03Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/59663-
dc.description.abstractWe study a dynamic model of monopolistic provision of commitment devices to sophisticated, Strotzian decision makers. We allow for unobservable heterogeneity at the contracting stage in the agents' preferences for commitment vs. flexibility. The first-best contracts under complete information allow to successfully commit to the optimal level of flexibility. Importantly, this outcome is robust to small amounts of unobservable heterogeneity. When individuals differ substantially in their self control, under asymmetric information highly time-inconsistent agents exert a positive externality on low time-inconsistent fellows. Its magnitude depends on the degree of contractual flexibility and the likelihood of facing temptation. We derive the optimal screening mechanism and characterize its distortions. We analyze the inefficiency of the monopolist's offers in terms of the induced balance between commitment and flexibility.en_US
dc.language.isoengen_US
dc.publisherNorthwestern Univ., Kellogg Graduate School of Management, Center for Mathematical Studies in Economics and Management Science Evanstonen_US
dc.relation.ispartofseriesDiscussion Paper, Center for Mathematical Studies in Economics and Management Science 1520en_US
dc.subject.jelD42en_US
dc.subject.jelD62en_US
dc.subject.jelD82en_US
dc.subject.jelD86en_US
dc.subject.jelD91en_US
dc.subject.jelG21en_US
dc.subject.jelG23en_US
dc.subject.ddc330en_US
dc.subject.keywordtime inconsistencyen_US
dc.subject.keywordself-controlen_US
dc.subject.keywordcommitmenten_US
dc.subject.keywordflexibilityen_US
dc.subject.keywordcontractsen_US
dc.subject.keywordscreeningen_US
dc.subject.keywordinformation externalitiesen_US
dc.titleContracting over commitment vs. flexibility under asymmetric informationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn651735718en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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