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We introduce ex post participation constraints in the standard sequential screening model. This captures the presence of consumer withdrawal rights as, for instance, mandated by EU regulation of "distance sales contracts". With such additional constraints, the optimal contract is static and,...
Persistent link: https://www.econbiz.de/10010402944
We show that every sequential screening model is equivalent to a standard text book static screening model. We use this result and apply well-established techniques from static screening to obtain solutions for classes of sequential screening models for which standard sequential screening...
Persistent link: https://www.econbiz.de/10011626592
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