Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103780
Authors: 
Krähmer, Daniel
Strausz, Roland
Year of Publication: 
2014
Series/Report no.: 
SFB 649 Discussion Paper 2014-045
Abstract: 
We introduce ex post participation constraints in the standard sequential screening model. This captures the presence of consumer withdrawal rights as, for instance, mandated by EU regulation of "distance sales contracts". With such additional constraints, the optimal contract is static and, unlike with only ex ante participation constraints, does not elicit the agent's information sequentially. With ex post participation constraints it is insufficient to consider only local incentive constraints. We develop a novel technique to identify the relevant global constraints.
Subjects: 
Sequential screening
dynamic mechanism design
participation constraints
Mirrlees approach
JEL: 
D82
H57
Document Type: 
Working Paper

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