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→C.2: Contracting with and without commitment
====C2 (c)====
We can use the revelation principle to limit attention to direction mechanisms in which the agent reveals his type in the first period. As a result, the principle knows his type going into the second period and can therefore pin the agent at its IR for the second period (ie, the agent has no profits during its second period). Because of this, the high type agent will demand more profits/information rent in the first period and the principal cannot earn as much in this setup as he did in (a) and (b).
====C2 (d)====
====C2 (e)====
