We examine a model of long-term contracting in which the buyer is privately informed about the stochastic process by which her value for a good evolves. In addition, the realized values are also private information. We characterize a class of environments in which the profit-maximizing long-term contract offered by a monopolist takes an especially simple structure: we derive sufficient conditions on primitives under which the optimal contract consists of a menu of deterministic sequences of

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... ic contracts. Within each sequence, higher realized values lead to greater quantity provision; however, an increasing proportion of buyer types are excluded over time, eventually leading to inefficiently early termination of the relationship. Moreover, the menu choices differ by future generosity, with more costly (up front) plans guaranteeing greater quantity provision in the future. Thus, the seller screens process information in the initial period, and then progressively screens across realized values so as to reduce the information rents paid in future periods. , as well as conference and seminar participants, for their many helpful comments and suggestions. This work has benefited greatly from the detailed comments of two anonymous referees and the editor, Bruno Biais. The second author also thanks Microsoft Research New England for its generous hospitality during stays in which a significant portion of this work was completed.