Fehr, Ernst; Powell, Michael; Wilkening, Tom - In: American Economic Review 111 (2021) 4, pp. 1055-1091
We study subgame-perfect implementation (SPI) mechanisms that have been proposed as a solution to incomplete contracting problems. We show that these mechanisms, which are based on off-equilibrium arbitration clauses that impose large fines for lying and the inappropriate use of arbitration,...