Abstract
<title>Abstract</title> <p>This paper studies a mechanism-design problem in which the principal cannot commit to downstream rules because rule-setting authority is delegated to another strategic agent. The principal controls only an architecture instrument that changes the intermediary’s incentives. In a sequential developer–intermediary–investor game, the developer is privately informed, but the regulated decision is made by the intermediary. This separates the locus of information from the locus of control. I identify primitive conditions under which the welfare-maximising architecture is independent of the developer’s type. Undera subsidy-only transfer constraint, the report-invariant mechanism d(ˆγ) = ¯ d, s(ˆγ) = 0 pointwise dominates every feasible report-contingent mechanism whenever W(γ, d) is maximised at ¯ d for all types and the maximal architecture satisfies participation without subsidy. The binding constraint is the architecture bound, not incentive compatibility. Screening is therefore wasteful: it buys information with no allocative value and, under incentive compatibility, requires subsidies to lower types. The result identifies structural limited commitment— delegated real authority over downstream rules — as distinct from temporal limited commitment, and shows when architecture-commitment substitutes for rule-commitment. The separation and dominance theorems are analytical and conditional on primitive monotonicity and participation properties. For the calibrated sequential game, the direct welfare effect is proved analytically; low d monotonicity and global-branch dominance are certified by outward-rounded interval arithmetic, while the increasing-differences claim remains a reproducible all-roots grid verification. JEL Classification: D82 , D02 , C72</p>