Dynamic contracting under adverse selection and renegotiation

• 成果类型: Article
• 署名作者: Maestri, Lucas
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2017.06.007
• 发表日期: 2017
• 页码: 136-173
• 关键词: Dynamic contracting; screening; RENEGOTIATION

摘要

We study the effects of renegotiation in an infinitely-repeated screening model with long-term contracts. We propose a simple and tractable recursive formulation to study equilibria in which the monopolist's profit is maximized after every history. We show that the monopolist sequentially screens high-type consumers and characterize second-degree price discrimination policies. The monopolist's ability to extract rent from high-type consumers by distorting the allocation of low-type consumers vanishes as all parties become more patient. As a result, all distortions disappear and the allocation becomes efficient. (C) 2017 Elsevier Inc. All rights reserved.