In sequential screening problems it is found that, under some regularity conditions, local incentive compatibility constraints are sufficient for implementability. However, this follows from the assumption that the possible distributions of the unknown variable satisfy either first-order...

A government delegates a build-operate-transfer project to a private firm. In the contracting stage, the operating cost is unknown. The firm can increase the likelihood of facing a low cost, rather than a high cost, by exerting costly effort when building the infrastructure. Once this is in...

Riordan and Sappington (JET, 1988) show that in an agency relationship in which the agent's type is correlated with a public ex post signal, the principal may attain first best (full surplus extraction and efficient output levels) if the agent is faced with a lottery such that each type is...

We study a sequential screening problem in which the information structure is characterized by neither first-order stochastic dominance (FOSD) nor mean-preserving spread (MPS). Specifically, we refer to a procurement contract with privately known mean and spread of cost distribution. The...