Subgame Perfect Implementation with Almost Perfect Information and the Hold-Up Problem
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Subgame Perfect Implementation with Almost Perfect Information and the Hold-Up Problem
| Title: | Subgame Perfect Implementation with Almost Perfect Information and the Hold-Up Problem |
| Author: |
Holden, Richard T.; Fudenberg, Drew; Aghion, Philippe
Note: Order does not necessarily reflect citation order of authors. |
| Citation: | Aghion, Philippe, Drew Fudenberg, and Richard T. Holden. 2009. Subgame perfect implementation with almost perfect information and the hold-up problem. NBER Working Paper Series 15167. |
| Full Text & Related Files: |
Aghion_SubgamePerfect.pdf (265.2Kb; PDF) 
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| Abstract: | The foundations of incomplete contracts have been questioned using or extending the subgame perfect implementation approach of Moore and Repullo (1988). We consider the robustness of subgame perfect implementation to the introduction of small amounts of asymmetric information. We show that Moore-Repullo mechanisms may not yield (even approximately) truthful revelation in pure or totally mixed strategies as the amount of asymmetric information goes to zero. Moreover, we argue that a wide class of extensive-form mechanisms are subject to this fragility. |
| Published Version: | http://www.nber.org/papers/w15167 |
| Terms of Use: | This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA |
| Citable link to this page: | http://nrs.harvard.edu/urn-3:HUL.InstRepos:3708929 |
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FAS Scholarly Articles [5138]
Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
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