Subgame Perfect Implementation with Almost Perfect Information


Aghion, Philippe, Drew Fudenberg, and Richard Holden. 2007. “Subgame Perfect Implementation with Almost Perfect Information”. Copy at
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Date Published:

Dec 6, 2007


The theory of incomplete contracts has been recently questioned using or extending the subgame perfect implementation approach of Moore and Repullo (1988). We consider the robustness of this mechanism to the introduction of small amounts of asymmetric information. Our main result is that the mechanism may not yield (even approximately) truthful revelation as the amount of asymmetric information goes to zero.

Last updated on 07/14/2016