Dynamic contracting under adverse selection and renegotiation

Resumo

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. © 2017 Elsevier Inc.

Ficha do documento

Tipo

Artigo científico

Ano

2017

Instituição

Academic Press Inc.

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1016/j.jet.2017.06.007

Identificador

oai:repositorio.fgv.br:10438/25511

Palavras-chave

Dynamic ContractingRenegotiationScreeningDívida - Renegociação