Sequential screening

We study price discrimination where consumers know at the time of contracti ng only the distribution of their valuations but subsequently learn their a ctual valuations. Consumers are sequentially screened, as in a menu of refu nd contracts. Initial valuation uncertainty can differ in terms of first-or der stochastic dominance or mean-preserving-spread. In both cases, optimal mechanisms depend on informativeness of consumers' initial knowledge about their valuations, not on uncertainty that affects all consumers. It can be optimal to "subsidize" consumers with smaller valuation uncertainty through low refund to reduce the rent to those who face greater uncertainty and pu rchase more "flexible" contracts.