TY  - JOUR
AU  - Aghion,Philippe
AU  - Fudenberg,Drew
AU  - Holden,Richard T.
TI  - Subgame Perfect Implementation with Almost Perfect Information and the Hold-Up Problem
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15167
PY  - 2009
Y2  - July 2009
UR  - http://www.nber.org/papers/w15167
L1  - http://www.nber.org/papers/w15167.pdf
N1  - Author contact info:
Philippe Aghion
Department of Economics
Harvard University
1805 Cambridge St
Cambridge, MA 02138
Tel: 617/495-6675
Fax: 617/495-4341
E-Mail: paghion@fas.harvard.edu

Drew Fudenberg
Department of Economics
Harvard Unviersity
1805 Cambridge St
Cambridge, MA  02138
E-Mail: dfudenberg@harvard.edu

Richard T. Holden
Australian School of Business
University of New South Wales
Room 470B
Sydney, NSW, 2052, AUSTRALIA
Tel: +61 2 9385 4700
Fax: +1 773 409 5383
E-Mail: richard.holden@unsw.edu.au
AB  - 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.
ER  -