Please use this identifier to cite or link to this item:
Krähmer, Daniel
Strausz, Roland
Year of Publication: 
Series/Report no.: 
SFB/TR 15 Discussion Paper 363
This paper considers the canonical sequential screening model and shows that when the agent has an expost outside option, the principal does not benefit from eliciting the agent's information sequentially. Unlike in the standard model without expost outside options, the optimal contract is static and conditions only on the agent's aggregate final information. The benefits of sequential screening in the standard model are therefore due to relaxed participation rather than relaxed incentive compatibility constraints. We argue that in the presence of expost participation constraints, the classical, local approach fails to identify binding incentive constraints and develop a novel, inductive procedure to do so instead. The result extends to the multi-agent version of the problem.
Sequential screening
dynamic mechanism design
participation constraints
Mirrlees approach
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.