Ex post information rents in sequential screening

Daniel Krähmer and Roland Strausz

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.

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Year of publication:	2014
Authors:	Krähmer, Daniel ; Strausz, Roland
Publisher:	Berlin : SFB 649, Economic Risk
Subject:	information rents \| sequential screening \| information disclosure \| Theorie \| Theory \| Asymmetrische Information \| Asymmetric information \| Prinzipal-Agent-Theorie \| Agency theory \| Informationsökonomik \| Economics of information \| Signalling \| Informationswert \| Information value \| Monopol \| Monopoly \| Ökonomische Rente \| Economic rent \| Informationsverhalten \| Information behaviour \| Preisdifferenzierung \| Price discrimination